Such a political base has allowed the Euro to climb back to its highest against the US Dollar in over a week, holding above the psychological 1.12 at the time of writing. Should the Euro break above its 50-day moving average of 1.123, it could find stronger resistance at its 100-day moving average of near 1.13.
Markets to view Pound through a political prism, as hunt for new UK Prime Minister comes into focus
Perhaps voters on the continent have been reminded of the virtues of the European Union dream, given the political mess that’s playing out in the United Kingdom. Judging by the European Parliament election results, Brexit has further polarized voters in the United Kingdom, with Nigel Farage’s Brexit Party set to win the most seats in the UK at the expense of Conservatives and Labour.
Following Theresa May’s announcement that she will step down as Prime Minister on June 7, the UK political lens will now focus on the leadership transition within the Conservatives, with eight candidates set to vie for her position. Any sense that chances of a no-deal Brexit are on the rise could weigh negatively on the Pound, especially if a hard-line Brexiteer takes over as PM.
