The Pound (GBP) saw significant losses against the other majors on Wednesday as international development secretary Priti Patel resigned from her position following a number of undisclosed meetings with Israeli officials.
This is the second cabinet resignation within in a week after Sir Michael Fallon quit as defence secretary a few of days ago, prompting fears of instability at the top of government as Theresa May is forced to make another reshuffle.
Sterling may look to mount a recovery later today however as the sixth round of Brexit talks get underway, with investors hoping that signals that both sides wish to see negotiations sped up may help to accelerate the pace of talks.
The Pound Euro (GBP EUR) exchange rate tumbled by around half a cent yesterday as the developing political crisis surrounding Patel caused the pairing to slump.
However also adding to Sterling’s woes yesterday was a report from the FT suggesting that a number of Banks are warning of significant job losses in the City of London unless there is more clarity on Brexit from the government.
Further strengthening the single currency this morning was the release of Germany’s latest trade figures which revealed that the nation’s trade surplus swelled from €20.1bn to €24.1bn in September.
Sterling plummeted against the US Dollar (USD) on Wednesday as markets feared that May’s government is becoming increasingly unstable following numerous scandals in recent weeks.
While the pairing rallied in overnight trade as these gains proved to be short lived as the pairing sank again on Thursday morning as investors soured on the Pound on fears the government’s instability could hamper the last round of Brexit talks.
However the US Dollar could be in for some volatility as well today as the US senate unveils its own tax-cut bill, with any major departure from Trump’s proposals likely to weigh heavily on the US currency as it further frustrates the process.
The Pound Canadian Dollar (GBP CAD) exchange rate continued to come under pressure yesterday as oil stabilised just below a two-year high, helping to bolster the oil-correlated ‘Loonie’.
Sterling is trading close to a weekly low against the Australian Dollar (AUD) this morning as Theresa May’s scandal hit cabinet does little to inspire confidence in the UK government.
New Zealand Dollar
The Pound New Zealand Dollar (GBP NZD) exchange rate is tumbling again this morning after the pairing’s gains last night in the wake of the Reserve Bank of New Zealand (RBNZ) decision to leave interest rates on hold proved to be short lived.