Pound looks vulnerable this week

Andrew Masters FIBO Group

The British pound has slumped in the European trading session today after reports over the weekend that British Prime Minister Theresa May’s time at downing st may be coming to an end.

According to a report from the Daily mail, Around 40 conservative MP’s from Mrs May’s conservative party are ready to vote for a no confidence motion which would see the collapse of the government which is exactly what the UK economy does not need right now as it comes to terms with Brexit.

Also adding to the woes was a letter sent to Mrs May from Foreign Secretary Boris Johnson and Environment Secretary Michael Gove who demanded that the prime minister come down hard on the EU and demand a strict deadline after Brexit for the whole thing to end.

“It coincided with the leak of the letter from Gove and Johnson to May apparently instructing her how to run the talks,” said Jane Foley, head of currency strategy in London at Rabobank.

“Both suggest further trouble in the cabinet and since this would have negative implications for Brexit talks, the political outlook currently appears very rocky for the pound again.” She added

With no Brexit deal in sight, representatives from the EU may be happy to let the situation drag out and wait for the inevitable collapse of May’s government and the political instability that will follow which many believe will give them the upper hand in negotiations and a better deal for breaking away from the UK.

Author

Andrew Masters

FIBO Group

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