The Pound (GBP) is trending higher against most of its peers this morning as the UK currency shakes off some of the political uncertainty that weighed it down last week.
Investors were unsettled towards the end of last week amidst reports that Theresa May could face a leadership challenge as a group of Rebel MPs called for her to step down.
However, these fears appear to have diminished over the weekend as a number of prominent party members came out in support of the Prime Minister, while May faced her critics head on, claiming that she was ‘pretty resilient’ and that she would not ‘hide from a challenge’.
The Pound could fall back again later this afternoon however as May delivers a speech on Brexit in parliament, with analysts suggesting it will do little to alter the opinions of EU officials ahead of the fifth round of Brexit talks this week.
The Pound Euro (GBP EUR) exchange rate is making tentative gains at the start of this week’s session as Sterling overcomes concerns of a growing rift in the Conservative party.
Reduced fears regarding the stability of Theresa May’s leadership also helped the pairing to gain despite better than expected German Industrial Production figures earlier this morning as output growth reached its fastest pace since 2011.
The Euro’s failure to gain following the upbeat German data can be party attributed to growing uncertainty over the Catalan governments call for independence, with massive unity protests in Barcelona over the weekend further complicating the situation.
Sterling climbed around half a cent against the US Dollar (USD) this morning, rebounding from a four-week low as markets were reassured by comments from Theresa May in the Sunday Times over the weekend.
Meanwhile, investors are a little more cautious towards the ‘Greenback’ this morning following a Tweet from President Trump over the weekend in which he claimed that ‘Only one thing will work’ with North Korea, with markets fearing that his allusions to military action against the secretive nation could reignite tensions.
After falling to a new three-week low on Friday following some upbeat Canadian data, the Pound Canadian Dollar (GBP CAD) exchange rate rallied by around half a cent this morning as investor confidence in Theresa May rebounded.
Sterling jumped by around a cent against the Australian Dollar (AUD) in early trade this week amid further suggestions that the next policy move from the Reserve Bank of Australia (RBA) may be a rate cut rather than a hike.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate also climbed sharply at the start of the session today as the ‘Kiwi’ was weakened as the final count in New Zealand’s election revealed that the ruling National party lost two further seats after special votes were counted.