EUR GBP Slumps Despite German Business Confidence

The EUR GBP exchange rate was lower by -0.06% on Wednesday as the Boris Johnson saga continued to drag on. The British police are launching their own inquiry and it is only the second time in a century that a sitting Prime Minister has faced such an investigation. The euro v pound sterling will have German consumer confidence ahead today.

The EUR to GBP rate was trading at 0.8361 and the pair is stuck in the middle of last week’s trading range.

Macron calls for a ‘de-escalation’ of tensions

Emmanuel Macron has demanded a “de -escalation” of tensions between Russia and Ukraine as the Kremlin moved over 100,000 troops near to the border, while denying it is planning an invasion.

The US said that it had put 8,500 troops on standby, but it was recently suggested that if Russia wanted to invade Europe, they could be in Paris within 30 days.

It’s likely that Putin knows this is the ultimate opportunity to take back a largely Russian speaking country with the European economy crippled by the coronavirus and seeing a power vacuum after the departure of long-time Chancellor of Germany, Angela Merkel.

The threat is a serious one for Germany and despite their grandstanding, Putin could turn off the taps and Europe’s largest economy would have no gas within around two weeks, it was reported.

The French President has said that he plans to hold telephone talks with the Russian President Vladimir Putin on Friday, but there is unlikely to be anything of note. The Russian President asked that Ukraine not be allowed to join NATO and the EU, but the West refuse those demands, so there is unlikely to be any concessions.

The German economy has consumer confidence released today with a worsening expected from -6.8 to -7.8. The key data will be the first estimate for GDP in Europe’s largest economy due this Friday. There are fears for a recession as the latest restrictions bite, however PMI data this week showed that supply chain issues had receded.

Police investigating PM partying, DUP baiting on Brexit

The Sue Gray report being released on the Boris Johnson lockdown parties will now take a back seat to a police investigation. The first of its kind in a century against a sitting Prime Minister.

Boris Johnson still faces headwinds over his future and that will put pressure on the pound sterling as traders see confusion in the wind over the future of the leader, or the future leader.

Meanwhile, A former leader has taken the first step towards stopping the Northern Ireland Protocol border checks between Ulster and Great Britain.

Stormont’s Agriculture Minister Edwin Poots has delivered a paper asking for executive approval for Irish Sea border checks to continue. That could see the DUP MLA for Lagan Valley attempting to halt the continuation of post-Brexit port checks.

It comes after Sir Jeffrey Donaldson, the current DUP leader, warned the UK Government that Northern Ireland is not prepared to be “strung out for weeks” waiting for action from Downing Street.

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