However, the euro was unable to gain on Sterling following the news that European Central Bank (ECB) policymaker Sabine Lautenschläger would be resigning before the end of her full term. As one of the most outspoken policy hawks in the ECB, this has left euro traders feeling jittery as the bank’s future dovishness is expected to increase. Carsten Brzeski, Chief Economist at ING, commented: “If Lautenschläger’s resignation has really been driven by her opposition to the ECB’s latest decision to cut rates further and to restart quantitative easing, it would worsen the divide between hawks and doves.” In European economic news, the Eurozone’s year-on-year M3 money supply increased from 5.1 percent to 5.7 percent, providing a positive indication for the economy for the quarters ahead. As a result, this has provided some confirmation that the ECB’s stimulus package has had a positive impact on the bloc’s economic growth.
Meanwhile, the pound has failed to gain on the European currency after Prime Minister Boris Johnson further exacerbated fears of an early general election, while maintaining that the UK would leave the EU on October 31.
Mr Johnson said: “This parliament must either stand aside and let this government get Brexit done, or bring a vote of confidence and finally face the day of reckoning with the voters.”
Consequently, Sterling has struggled against many of its competitors today as the UK remains in a state of political deadlock, with opposition parties demanding that a no-deal Brexit be completely shelved before pursuing a general election.
Labour leader Jeremy Corbyn said: “He says he wants a general election. I want a general election. It’s very simple: if he wants an election, get an extension and let’s have an election.”
The GBP/USD exchange rate could improve tomorrow, however, if September’s UK consumer confidence improves.