Pound Drops As May To Reveal Departure Date After Brexit Vote
May 17 2019 - 2:07AM
RTTF2
The pound came under pressure against its major counterparts in
early European deals on Friday, as U.K. Prime Minister Theresa May
had agreed to give a date for her departure following a vote for
Brexit deal next month.
Following talks with Chairman Graham Brady on Thursday, May
promised to offer the details of her exit from Downing Street early
next month.
Brady and May would meet again in June to "agree a timetable for
the election of a new leader."
This will come after the vote on the Withdrawal Agreement Bill
in the House of Commons, scheduled in the week of June 3.
Investor sentiment dampened amid conflicting reports about trade
talks between the world's two largest economies.
According to reports, China's state media signaled a lack of
interest in resuming trade talks with the U.S. under the current
threat to escalate tariffs.
U.S. Treasury Secretary Steven Mnuchin said earlier this week
that American officials "most likely will go to Beijing at some
point" in the near future to continue trade talks. He subsequently
said he has "no plans yet to go to China."
The currency has been trading in a negative territory against
its major counterparts in the Asian session, except against the
greenback.
The pound depreciated to 1.2770 against the greenback, its
weakest since January 15. If the pound extends fall, 1.25 is likely
seen as its next support level.
The pound that ended Thursday's trading at 1.2923 against the
Swiss franc fell to more than a 3-month low of 1.2890. The pound is
seen finding support around the 1.27 region.
The U.K. currency weakened to a 4-month low of 139.89 against
the yen from yesterday's closing value of 140.54. The next possible
support for the pound is seen around the 136.5 level.
Bank of Japan Governor Haruhiko Kuroda said that Japan's
extremely low interest rates are likely to remain at the current
levels for an extended period given the uncertainties surrounding
economic activity and prices.
Kuroda said the Bank would "maintain the current extremely low
levels of short- and long-term interest rates for an extended
period of time, at least through around spring 2020, taking into
account uncertainties regarding economic activity and prices
including developments in overseas economies and the effects of the
scheduled consumption tax hike."
The pound declined to 0.8749 against the euro, a level unseen
since February 19. This follows a high of 0.8729 hit at 5:00 pm ET.
The currency is poised to target support around the 0.89 mark.
Looking ahead, U.S. leading indicators for April and University
of Michigan's preliminary consumer sentiment index for May are
scheduled for release in the New York session.
At 1:40 am ET, Federal Reserve Governor Richard Clarida will
deliver a speech about the Federal Reserve's policy strategy,
tools, and communication practices at an event hosted by Federal
Reserve Bank of Philadelphia.
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