The EUR/GBP cross holds positive ground near 0.8725, snapping the three-day losing streak during the early European session on Wednesday. The Pound Sterling (GBP) softens against the Euro (EUR) due to the upcoming UK political events. European Central Bank President Christine Lagarde is set to speak later on Wednesday.
Manchester's Gorton and Denton constituency is scheduled to hold a special election to fill a vacated parliamentary seat on Thursday. This event is seen as a major test for UK Prime Minister Keir Starmer amid internal party discontent and low approval ratings.
"A heavy defeat for the ruling Labour Party could re-ignite speculation over the Labour leadership and again weigh on sterling," said ING's FX strategist Francesco Pesole.
On the Euro front, the US Supreme Court’s ruling on Friday struck down many of the tariffs that US President Donald Trump put in place. On Saturday, Trump responded by announcing that he would impose a further 15% tariff. Due to the higher import duties, the European Parliament agreed on Monday to postpone a vote on the EU's trade agreement with the US.
Fears of a renewed trade war could undermine the EUR against the GBP, as the Eurozone is more vulnerable to these disruptions than the UK.
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