industry

Pound euro exchange rate: GBP nosedives as Raab resigns in protest at Brexit deal


The pound is plummeting against the euro and the majority of its other peers today as markets react to the resignation of Brexit secretary Dominic Raab.

Mr Raab’s resignation comes hot on the heels of the news that Theresa May had secured the backing of her Cabinet for a draft Brexit deal with the EU.

The announcement of which helped to stabilise Sterling after a chaotic day of trade on Wednesday.

Announcing his resignation on Twitter, Mr Raab stated he could not “in good conscience support the terms proposed for our deal with the EU”.

POUND LIVE: LATEST GBP STERLING MOVEMENT HERE

Mr Raab stated his opposition was based on two key parts of the deal, one being that “the regulatory regime proposed for Northern Ireland presents a very real threat to the integrity of the United Kingdom”.

The second was his inability to support “an indefinite backstop arrangement, where the EU holds a veto over our ability to exit”.

Mr Raab’s resignation comes as the backlash against the draft deal from MPs continues to grow and will likely further fuel speculation that the Prime Minister could face a vote of no-confidence after she faces Parliament later today.

Adding to the pressure on Sterling this morning has also been the release of the UK’s latest retail sales figures as the Office for National Statistics (ONS) which reports that sales growth unexpectedly contracted for the second month running in October.

Looking ahead, this volatility in the pound is only likely to intensify through to the end of this week’s session as the absence of any notable UK economic data leaves the focus squarely on Brexit.

This comes with the possibility of further resignations resulting in considerable downside risks to the pound.

Meanwhile, with Brexit developments likely to also have an impact on the euro in wider trading, euro investors may turn their attention to an upcoming speech by European Central Bank Governor Mario Draghi.

Speaking at the Frankfurt European Banking Congress during Euro Finance Week, euro investors will be looking for any hints on the ECB’s policy outlook and whether the recent slowdown in Eurozone growth will require a rethink from the bank going forward.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.