Foreign Exchange Daily Market Update 25/05/2017

Thu, May 25, 2017

Pound Falls as Brexit Tensions Rise, Conservative Lead Narrows.

The pound fell below $1.30 after the U.K. hardened its Brexit rhetoric and polls predicted a narrower-than-expected win for Prime Minister Theresa May in June elections.

Sterling weakened against across the board, as the latest Opinion research survey showed the opposition Labour Party cutting May’s Conservative Party lead to 13 points from 15 points a week earlier. A YouGov survey in the Sunday Times put Jeremy Corbyn nine points behind, this is the first time it has had a single-digit gap since September. The pound also declined after Brexit Secretary David Davis said the U.K. will quit talks with the European Union if the bill for exiting the bloc exceeds 100 billion euros ($112 billion).

Opinion polls show a sharp narrowing in the Conservative lead, from a massive 19% to 9 %, while also warnings that the U.K. could walk away from an exit deal if the final exit bill is too big don’t encourage optimism about negotiations that start in earnest after the U.K. election

The Pound fell 0.5% to $1.2974 this morning.  It did break above the crucial $1.30 mark last week, reaching the highest since September, and closed above that level on Friday. GBP also weakened 0.2% against the Euro to 1.155

Data to look out today.  

13:30 USD initial Jobless claims.

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