With Prime Minister Theresa May's last ditch Brexit deal dead on arrival in Parliament, her own tenure at 10 Downing Street coming to an end and the Tory succession apparently awarding right of first refusal to Boris Johnson, the sterling has dropped to its lowest level against the dollar in five months, losing 3.8% in two weeks.
At this point almost any development, the resignation of Ms May, the abandonment of the current Brexit deal or the ascension of Mr. Johnson would likely have a beneficial effect on the pound.
Ms May has been resisting, according to latest reports, scrapping her thrice rejected and much tweaked Brexit deal or ending her premiership after compromise offers were denied by her own Conservatives and opposition Labour.
After months of political turmoil in Parliament and an attempt by the Tories to remove Ms May as Prime Minister in December, neither the pro-Brexit members nor pro-EU remainers of her own party are willing to compromise, particularly on a deal whose main sticking points are unchanged.
Almost three years after the June 24th 2016 vote to leave the European Union and the original March 29th departure date Ms May is further from having her Brexit deal approved by Parliament than at any time since she first brought it to the House. .
“All we have before us is division and deadlock,” said Ms May, without seeming to note that that has been the case since she first returned from Brussels with the text.
She indicated that the Brexit bill would be published on Friday so that members could read it. Her office has said the bill will be put for a vote the week of June 3rd.
The European Union elections are on Thursday, where both the Conservative and Labour slates are expected to be severely punished by British voters. A plurality of 30% or more is forecast to go to Nigel Farage’s newly formed Brexit party, more than the combined vote for the Conservatives and Labour.
The pound is 12% below its post-Brexit high close against the dollar of 1.4338 on April 16th last year.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.