Sterling slid nearly half a percent yesterday on rising concerns about the progress of Brexit negotiations and worries Prime Minister Theresa May is facing a mounting challenge to her leadership.
May is set to meet Graham Brady, chairman of an influential committee representing members of parliament from her Conservative party, amid calls for her to set a date to step down, the BBC reported.
Currently Theresa May is walking on thin ice as the latest reports indicate a revolt against her could take place. MPs (Members of parliament) are probably not satisfied with cross-party talks so far.
Therefore, the pound is being dragged down as another dose of uncertainty hits the market.
The British currency was generally weak across the board, reserving some of its biggest losses against the dollar and the low yielding Japanese yen.
Britain’s Conservative government and the opposition Labour Party resumed Brexit talks to try to find a way to break the deadlock in parliament over the country’s departure from the European Union.
Investors have been broadly impervious to tepid economic data recently and even relatively hawkish comments from the Bank of England last week failed to jolt the currency.
Overall volatility in the currency markets remained near five-year lows and net positions by hedge funds in sterling have slipped back into negative territory.
With no key data in the UK over the next few days all eyes will be on Friday. We have 6 major potential market moving data being released.