EUR/GBP holds above 0.8700 as UK’s political crisis hurts the Pound

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The Euro (EUR) edges down against the British Pound (GBP) on Wednesday but keeps most of the gains taken over the previous days, with the seven-week high at the 0.8745 area at a short distance.

The Euro ticks down on Wednesday, but remains above 0.8700, near seven-week highs.
The Pound remains depressed amid rising pressures on Prime Minister Keir Starmer to resign.
A hawkish ECB stance helps keep the Euro buoyed this week.

The Euro (EUR) edges down against the British Pound (GBP) on Wednesday but keeps most of the gains taken over the previous days, with the seven-week high at the 0.8745 area at a short distance. A political crisis in the UK has boosted pressure on Prime Minister Keir Starmer to resign and is weighing down the Pound against its main peers this week.

News reports have revealed further evidence of the connections of the former UK’s ambassador to the US, Peter Mandelson, with convicted sex offender Jeffrey Epstein, triggering a series of events, reaching Starmer, who is facing calls from its own cabinet ministers to step down.

In the absence of key UK economic releases, in the first half of the week, the uncertain political situation in the UK is keeping the British Pound among the weakest-performing major currencies. The Euro, on the contrary, remains supported by the hawkish monetary policy stance conveyed by the European Central Bank last week.

On Thursday, the focus will be on the UK’s Q4 preliminary Gross Domestic Product (GDP) figures, which are expected to show a moderate slowdown to a 1.2% annualized growth from 1.3% in the previous quarter. Beyond that, Manufacturing Production is forecast to have stalled in December. The Pound would need a positive surprise to shake off the current bearish pressure.

In the Eurozone, the calendar has also been light, but comments from European Central Bank speakers have been supportive. President Lagarde remained confident that inflation would stabilise around 2%, playing down the low Consumer Prices Index (CPI) figures recently released. On Tuesday, Vice President De Guindos said that the recent Euro appreciation is not dramatic, supporting the view that interest rates will remain steady for some time.

(This story was corrected on February 11 at 12:16 GMT to state that Peter Mandelson is the former UK's ambassador to the US.)

Pound Sterling Price This week

The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.84%	-0.64%	-2.71%	-1.09%	-1.35%	-0.69%	-1.43%
EUR	0.84%		0.20%	-1.94%	-0.25%	-0.51%	0.15%	-0.60%
GBP	0.64%	-0.20%		-1.82%	-0.45%	-0.71%	-0.05%	-0.80%
JPY	2.71%	1.94%	1.82%		1.71%	1.43%	2.13%	1.24%
CAD	1.09%	0.25%	0.45%	-1.71%		-0.16%	0.41%	-0.35%
AUD	1.35%	0.51%	0.71%	-1.43%	0.16%		0.66%	-0.09%
NZD	0.69%	-0.15%	0.05%	-2.13%	-0.41%	-0.66%		-0.75%
CHF	1.43%	0.60%	0.80%	-1.24%	0.35%	0.09%	0.75%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).