Political turmoil has caused the pound to experience poor performance over the last couple of weeks. This morning, the pound has been trading at its lowest levels since January, this comes as Theresa May’s imminent departure from 10 Downing Street further increases Brexit confusion in the markets. With further uncertainty over who the next Prime Minister is likely to be, and their stance on Brexit, the risks of both a no deal and no Brexit have increased significantly.
The result of the confusion has kept the pound downtrodden with little signs of a resurgence. With results of the Conservative Party leadership election anticipated in July, it may be some time yet before there is any form of recovery for the pound. Little additional information on the data calendar has been available this week with the only minor releases getting overshadowed by parliament. This morning trading fell to new lows of 1.1277 against the euro and 1.2569 against the US dollar.
On the data calendar this morning there were some minor data releases for the Eurozone. Both Italian preliminary inflation data and German retail figures fell short of forecast. Throughout the day German states will be releasing their CPI figures, forecast for a fall from 1% to 0.3%, any surprise strength could be positive for the euro. From the US there is a smattering of data releases between 1.30 BST and 3.00 BST, the majority of which are forecast to show growth. The week is rounded off by FOMC member Williams speaking on the theory of monetary policy at 5.00 BST at the Federal Reserve Bank of New York.