Pound Weakens Amid U.K. Political Turmoil
November 13 2017 - 12:16AM
RTTF2
The pound declined against its key counterparts in early
European deals on Monday, as worries over the U.K. Prime Minister
Theresa May's leadership emerged after a media report showed that
Conservative party lawmakers have agreed to sign a letter of no
confidence in the P.M.
The Sunday Times newspaper reported that as many as 40 Tory MPs
were backing a motion of "no confidence" against the P.M.,
criticizing for her handling of EU negotiations.
This fell short of 48 MPs required to force a leadership
challenge and remove May from office.
Separately, a leak letter from Foreign Secretary Boris Johnson
and Environment Secretary Michael Gove May showed that the pair
complained to the Prime Minister regarding "insufficient energy" on
Brexit in some parts of the government and urged for a hard Brexit
approach.
"If we are to counter those who wish to frustrate that end,
there are ways of underlining your resolve," Johnson and Gove wrote
in the letter.
Data from property tracking website Rightmove showed that the
U.K. house prices slipped 0.8 percent on month in November.
That followed the 1.1 percent increase in October. The currency
has been trading in a negative territory in the Asian session.
The pound fell to a 10-day low of 0.8918 against the euro, off
its early high of 0.8844. Continuation of the pound's downtrend may
see it challenging support around the 0.90 area.
Data from Destatis showed that Germany's wholesale price
inflation eased to a 3-month low in October.
Wholesale prices climbed 3 percent year-on-year in October,
slower than the 3.4 percent increase seen in September. This was
the weakest growth since July, when prices gained 2.2 percent.
Having advanced to 1.3180 against the greenback at 5:15 pm ET,
the pound dropped to a weekly low of 1.3062. The pound is seen
finding support around the 1.30 area.
The pound weakened to near a 4-week low of 148.06 against the
yen and near a 3-week low of 1.3019 versus the franc, off its
previous highs of 149.68 and 1.3127, respectively. The pound is
seen finding support around 1.47 against the yen and 1.29 against
the franc.
Looking ahead, U.S. budget statement for October is due in the
New York session.
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