Pound Slides as Theresa May Faces Fresh Challenges to Leadership

The Great Britain pound fell today, losing 100 pips against the US dollar intraday. The sterling’s performance against other majors was no better. The main reason for the drop was political turmoil in Britain.

UK Prime Minister Theresa May faced a fresh challenge to her leadership as 40 Parliament members of her Conservative party agreed to sign a letter of no confidence to May. That was just eight members short of the number required to contest her leadership.

The deadlock in the Brexit negotiations between the European Union and the United Kingdom was another reason for the pound’s weakness. EU chief negotiator Michel Barnier set a two-week deadline for the talks, which was dismissed by UK Brexit Secretary David Davis. Barnier also said that the EU is preparing for a no-deal outcome.

The situation on the data front was no better, with bad news from the housing market. Rightmove reported that the House Price Index fell 0.8% in November following the 1.1% increase in October.

GBP/USD dropped from 1.3162 to 1.3090 as of 11:25 GMT today, touching the low of 1.3061 intraday. EUR/GBP gained from 0.8855 to 0.8898. GBP/JPY declined from 149.38 to 148.30.

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