Pound Falls On May's Leadership Concerns
May 16 2019 - 3:53AM
RTTF2
The pound declined against its major counterparts in the
European session on Thursday amid continued political uncertainty,
as U.K. Prime Minister Theresa May is expected to ask to set a
departure date during her meeting with the 1922 Committee
today.
May is meeting with members of the executive of the 1922
Committee of backbench Conservative MPs amid growing pressure to
set a date for her departure from office or else face another
confidence vote next month.
The withdrawal agreement is expected to put to vote in
Parliament for the fourth time in June, although the possibility of
passing it seemed low.
Markets are pricing the failure of Brexit deal again, triggering
the removal of May from office.
Caution prevailed after the United States hit Huawei with severe
sanctions, adding to prevailing uncertainty over trade.
The currency held steady against its major rivals in the Asian
session, excepting the yen.
The pound weakened to 0.8746 against the euro, its lowest since
February 19. The currency is poised to target support around the
0.89 mark.
Data from Eurostat showed that the euro area trade surplus
declined in March on higher imports.
The trade surplus fell to a seasonally adjusted EUR 17.9 billion
from EUR 20.6 billion in February. The surplus was also below the
forecast of EUR 19.4 billion.
The pound slipped to a new 3-month low of 1.2810 against the
greenback from Wednesday's closing value of 1.2840. The pound is
likely to test support around the 1.27 region.
The U.K. currency that closed Wednesday's trading at 1.2954
against the Swiss franc fell to near a 2-month low of 1.2918. Next
key support for the pound is seen around the 1.27 level.
Although the pound declined to a 4-month low of 140.20 against
the yen early in the session, it recouped some of its losses in a
short while. The pair was valued at 140.74 when it ended deals on
Wednesday.
Looking ahead, U.S. weekly jobless claims for the week ended May
11, housing starts and building permits for April are due in the
New York session.
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