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Sterling is at 10-week low

The British pound is holding close to $1.29 – a 10-week low on Thursday after reports Prime Minister’s Theresa May’s talks with the opposition Labour Party over Brexit hit the sand and, as a resurgent dollar, encouraged the sale of sterling.

The British currency has sharply weakened this week when lawmakers returned from the Easter recess with little sign of progress in May’s efforts to persuade them to back the Brexit deal.

The UK’s date of leaving the European Union was pushed back by the end of October, but sterling traders are worried about political uncertainty in the meantime, the impact on the economy, and renewed push for May to step down.

“The implied probability of Brexit happening by end-June has changed little subsequent to suggestions that PM May could bring the WA (Withdrawal Agreement) back to the Commons next week,” said RBC’s chief currency strategist Adam Cole.

“Elsewhere, (Boris) Johnson is racing ahead as favourite for next PM as perceived risk of an early election continues to diminish.”

Sterling fell 0.1% to $1.2888, its weakest since mid-February. Versus the euro, the pound fell 0.1% to 86.525 pence.

The dollar, which climbed to a 2-year high against rivals, as economic data points to a US economy outperforming other countries, also weighed on the pound.

 

Source: Reuters