EUR/GBP holds firm on Tuesday after hitting a three-week high of 0.8697 earlier in the day, as traders assess rising political instability in the United Kingdom (UK) and stalled US-Iran negotiations.
At the time of writing, the cross is trading around 0.8679, up roughly 0.25% The British Pound (GBP) trades on the defensive across the board as pressure continues to mount on Prime Minister Keir Starmer following Labour’s heavy losses in the recent local elections
According to reports, 78 of Labour’s 403 MPs have called on Starmer to step aside, just short of the 81 MPs needed to trigger a formal leadership contest. Meanwhile, Starmer has publicly rejected calls to resign, stating that he will “get on with governing.” At the same time, the Euro (EUR) is also struggling to gain meaningful traction as concerns over the economic fallout from the ongoing Middle East conflict continue to weigh on sentiment. The Eurozone’s heavy exposure to rising energy costs and supply disruptions linked to the Strait of Hormuz is fueling fears of slower growth and renewed inflationary pressure, leaving the upside in EUR/GBP limited in the near term.
Looking ahead, traders will focus on upcoming economic data from the Eurozone and the United Kingdom for fresh direction. On Wednesday, the Eurozone will release preliminary Q1 Employment Change and Gross Domestic Product (GDP) figures, along with March Industrial Production data. In the UK, monthly GDP data for March, preliminary Q1 GDP figures, as well as Industrial Production and Manufacturing Production data, are scheduled for release on Thursday.