British Pound plunged from news over the weekend that U.K. may halt Brexit talks while today’s U.K. inflation report hearings are in focus. U.S. dollar is also losing ground versus the G10 from political uncertainty in the country while the euro is broadly higher ahead of Markit PMIs and inflation report hearing today.
Pound Sinks as U.K. May Halt Brexit; Second Terror Attack in Two Months
The sterling plunged against the majors on Monday after the statements over the weekend that the U.K. will stand back from Brexit negotiations if it is forced to pay a big exit bill, as much as $100 billion. Meanwhile, the country is preparing for general elections on June 8. The latest polls showed that the current U.K. Prime Minister Theresa May, from the Conservative party, leads only by 8 points over Jeremy Corbyn from the Labour party, not as strong as it’s expected, which is very likely to decrease May’s strength over Brexit talks. Moreover, a terror attack at a concert in Manchester yesterday night with 19 dead and over 50 injured people, two months after the terror attack outside of House of Parliament in London adds extra pressure to the currency and the U.K stock indices. We would volatility to continue on Tuesday, as the market expects the release of the Inflation Report Hearings which includes a number of topics, among of them the monetary policy outlook.
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