Yesterday afternoon’s pessimism surrounding the capacity for Theresa May to negotiate any concessions or adjustments in Europe faded into concerns hinting towards the twilight of her premiership itself, the Pound took a tumble. The New York session saw an uncharacteristically large 0.35% wiped off of the value of the Pound. The trend continued up until May’s speech outside of number 10 this morning. Despite a downbeat and defeated expression, the Prime Minister’s battle-worthy words spurred traders and investors in the Pound to believe she will give it her all to maintain the stability within the UK government. Promising to give her all, the Pound began to appreciate, recovering the ground that the New York and Asian sessions had deprived the UK currency of. As reports and testimonies of Conservative MPs came flooding in over Twitter, letter and the rumour mill, the Pound caught one of its biggest bids of a rapidly fading 2018. Once the necessary survival threshold of 168 Conservative MPs had been recorded, the Pound freed itself from the day’s headwind, closing some 0.9% higher on the day. With strengthening risk appetite, the US Dollar lost some of the defensive demand that has supported it so well over the past weeks.
Discussion and Analysis by Charles Porter