Pound to Euro exchange rate: Sterling rises after Theresa May resigns

Harriet Brewis
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The value of the pound climbed slightly against the euro and US dollar following Theresa May’s announcement she will step down as Prime Minister on June 7.

Sterling shot up to €1.134 or $1.2710 shortly after Mrs May’s speech outside 10 Downing Street on Friday morning, but dropped again soon after.

At the time of writing, the value of £1 stands 0.05% higher against the euro at €1.134, and 0.12% higher against the dollar at US$1.268.

Though the gains have been small, they could see the pound shake its longest-ever losing streak against the euro, after 14 consecutive days of losses.

The pound rose sharply following Mrs May's speech at 10am on Friday, but then dipped down again shortly after. (BBC)

The pound slumped to a four-month low against the euro on Tuesday amid increasing political uncertainty surrounding Brexit.

Ian Strafford Taylor, chief executive of currency firm FairFX, said traders shouldn’t celebrate just yet at the pound’s brief upwards trajectory. He warned that the value of the pound was likely to continue to be unstable.

“Theresa May’s announcement that she will step down as Conservative party leader as of June 7, sparking the search for a new Prime Minister, brings further uncertainty for the future of the UK and for the pound as the indecision over Brexit rumbles on,” he told the Sun.

“The referendum result back in June 2016 marked the start of a roller coaster journey for the pound, which has failed to return to its pre-Brexit rates since the decision to leave the EU was announced.”

Meanwhile, Connor Campbell from fixed odds provider Spreadex insisted the temporary rise in sterling meant nothing given the pound's "miserable trading" this month.

"It is hard to see what the thinking is behind sterling’s rise,” he told the BBC.

"The chance of a no-deal Brexit has only increased, be it either through the UK bungling out of the EU because it can’t get its house in order, or because the Tories will appoint a hardline Brexiter as leader following the mass defection of voters to Nigel Farage’s Brexit Party during the European elections," he added.

The pound has lost more than 3% of its value this month in one of the worst periods for the currency since the 2016 EU referendum took place.

Investors will now turn their attention to the Conservative Party leadership race, as markets try to determine how the next Prime Minister will address the Brexit stalemate.