Escalating trade tensions between Washington and Beijing worry investors, as markets digest Theresa May’s resignation
- Moody’s: Uncertainty around Brexit is swirling
- Pound back over $1.27 as May resigns
- Clothing demand supports UK retail sales
- Introduction: Trump says Huawei could join trade deal
- European markets rally in early trading
Not a massive reaction from foreign exchange markets today to T May resignation. In truth they’d been starting to price this in weeks ago (see chart 1: sterling vs euro past month). And £ still trading within the band it’s been in for most of post-ref period (chart 2: past 5yrs) pic.twitter.com/q0S56ZnmFt
Despite bouncing back over $1.27, the pound is still close to its lowest level this year.
As this chart shows, it has shed nearly five cents since early May, as the Brexit crisis roared back into the headlines this month.
“Over the last few weeks Sterling has dropped as speculation has intensified that Theresa May needed to resign in order to clear the way for a new leader. This yet again increases the uncertainty. The chances of further delay to Brexit have now increased but so too have the chances of a hard Brexit.
“Although widely expected as she approached the podium, Sterling still managed to trade frenetically for a short period of time, before dropping back to a more settled level. Sterling is acting like a rabbit caught in the headlights. Unable to jump up or down.