Sterling has lost ground against the majority of major currencies following the recent confirmation that Theresa May is set to leave her position as Prime Minister on 7th June.
|Currency Pair||% Change (Month)||Difference on £200,000|
Political uncertainty historically weakens the currency in question, however on this occasion I think her departure was already largely factored into the market's expectations. Some may also deem her departure as a positive as this could mean the next leader may have a different stance on Brexit or prove more successful in getting a deal over the line.
Farage’s Brexit Party performed very well in the European elections which does add further uncertainty to the political situation as a relatively unknown party has gained a good deal of traction and the usual stalwarts lost considerable ground in votes.
With both politics and Brexit in complete limbo it does not bode well for the pound, in fact I am surprised we have not seen further losses. Sterling seems to be proving resilient without justification.
With May gone, the chances of a no deal now seem to have a higher probability. Without clarity on the country’s leader and Brexit I am afraid the pound could remain fragile against the majority of major currencies.
There is little data released this week and to be honest economic data releases are not having there usual impact as sterling value is being dictated by politics and Brexit.
GFK Consumer Confidence is released tomorrow , figures are expected to be poor, but there is expected to be slightly improved figures up from -13 to - 12. I am not convinced this will have a significant effect on the market unless the data arrives well away from expectations. As mentioned Brexit and politics will continue to dictate the value of sterling.
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