The Pound Sterling eased back into positive territory against both the euro and the US Dollar, though analysts expect any gains to be limited and swiftly lose momentum. The pound had struck a 10-year trough versus the Euro during overnight trade amid Brexit worries and dismal UK
economic data. The Office of National Statistics had reported that GDP in the 2nd quarter had unexpectedly contracted, suggesting Britain could soon be facing a recession.
As reported at 11;13 am (GMT) in London, the EUR/GBP was trading lower at 0.9265 Pence, a loss of 0.4801%; the pair has ranged from 0.92549 Pence to 0.93244 Pence in today’s session. The GBP/USD was higher at $1.2072, up 0.3266% and off the earlier peak pf $1.2075.
Italy’s Government in Disarray
What is helping the Pound currently, says FX strategists, is the escalating political turmoil in Italy which is drawing the market’s attention. Italy’s Deputy Prime Minister earlier stated that he “lost faith” in the government coalition and was calling for a snap election. Matteo Salvini of the League, a far-right political party, said that with all the in-fighting among Italy’s coalition parties, trying to govern was pointless. Salvini is calling on the Prime Minister to reconvene the Italian Parliament. Currently, the EUR/USD is trading at $1.1190, down 0.1567%.