EUR/USD has remained remarkably stable between 1.166 and 1.17 for five consecutive trading sessions with market participants seemingly confident that the newly appointed Italian government will not try to push for Italy’s exit from the Eurozone.
Sterling has been somewhat more volatile and could remain choppy ahead of House of Commons votes on the EU Withdrawal Bill on 12thJune. Prime Minister Theresa May’s Conservative Party is seven seats short of a working majority and will need support from the ten Democratic Unionist Party (DUP) MPs. But the ruling Conservative Party may still face defeat as a number of backbenchers have threatened to vote against the bill. This would likely not stop Brexit from going ahead but would arguably further weaken the government’s credibility before a key European Union Council meeting on 28-29th June.
