GBP/EUR remains in tight range – Politics seems to be the main driver for both currencies

Since October 2017 we continue to see GBP/EUR exchange rates stuck in a fairly tight range, with merely 4 cents movement from the high to low point in the last 8 months this is one of the tightest trading ranges the pairing has seen historically.

If you take into account that that there are concerns over how long Angela Merkel will continue to keep her position in Germany, the new Italian Government that may cause issues in the future along with a change over in Spain too. All of these points are leading to political uncertainty for the Eurozone and hence weakening Euro exchange rates.

On the flip side of it you have Brexit and the U.K. It was always quite clear that once the U.K voted to leave the EU Sterling would struggle due to the uncertainty that it bought along with it, however I feel that the way that negotiations have dragged on and the fact that there are still major issues within the U.K, including constant arguing between MP’s over Brexit, along with various marches and protest taking place across the country still with a view to stopping it happening altogether, all of this simply causes political and economic uncertainty which leads to investors steering clear of the currency as it is unclear as to what future fiscal plans will be.

My personal opinion is that we will see Sterling gain back ground on the Euro in the coming weeks, unless we get caught up with any further Brexit issues. We will start to see economic data for June filter through at the start of July and initial indications are that the U.K performed well this month, should this be the case then we may finally see a break out of this current range more than likely to the upside.

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