The Pound Sterling fell versus the US Dollar during Monday trade in London as concerns over a division within the Conservative Party grows. Moreover, the interest rate outlook from the Bank of England is becoming increasingly cloudy which has left the Pound on jittery ground. Only last Friday, the Pound had recouped from the 11-day trough versus the greenback on signs that progress in the Brexit negotiations were being made. EU had recently leaders confirmed that the Brexit talks’ second phase would begin in December and for investors that meant a step closer to ensuring that a trade relationship between the UK and the EU would be on the table.
As reported at 11:04 am (BST) in London, the GBP/USD was trading at $1.3172, down 0.10%; the pair has traded from a session low of $1.3162 to a session peak of $1.3227 in today’s trade. The EUR/GBP was down 0.28% and trading at 0.8913 Pence, off the session trough of 0.89010 Pence while the peak stands at 0.89387 Pence.
May’s Brexit Strategy at Risk?
What has tanked sentiment is this weekend’s media reports which said that there appeared to be an alliance between Conservative Party opposition and challengers to Theresa May’s hold on the Conservative Party as the Prime Minister. That could endanger Ms. May’s plans for her Brexit strategy which could lead Brexit discussions to stall and roll back any progress already made. Markets are also wary of Wednesday’s release of GDP figures for the UK which could help in gauging the likely next move by the Bank of England.