Blog

Sterling suffered major blows last week

• Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
• October 9, 2017
• No Comments

Britain’s pound fell to four-week lows last week, amid growing uncertainty over Prime Minister Theresa May’s control of the leadership and strong U.S labour market data that boosted the dollar.

Sterling was on track for its worst week in a year against the dollar and on a trade-weighted basis, after a more than 2 percent fall.

Prime Minister May said on Friday she would stay on as leader to provide stability after a former chairman of her Conservative Party said he had the support of 30 lawmakers who wanted her to quit.

May’s assurances gave sterling a brief lift after her statement – but they were not enough to assuage worries over divisions in the Conservative government.

Data last week showed speculators had turned positive on sterling for the first time in almost two years in the week up to last Tuesday. The gains were driven by expectations the Bank of England would raise interest rates and optimism around Brexit negotiations.

Adding to sterling’s woes have been weak economic data releases pointing to tepid growth in Britain’s economy.

Figures on Friday showed British economic productivity fell at its joint-fastest annual rate since 2013 in the 12 months after the country voted to leave the European Union.