Following a couple of days of volatility the pound now seems to have stabilised, at least for the short term. The markets have been kept busy as Westminster continues to provide headlines surrounding the cabinet backed proposed Brexit deal. Yesterday’s news of Brexit secretary Dominic Raab and Pensions Secretary Esther McVey resigning sent the pound into free fall, bottoming out at 1.1254 against the euro and 1.2738 against the dollar by the end of the day.
Yesterday evening Prime Minister May stated that she intends to stay in her position and deliver the Brexit deal she has fought hard for. The announcement comes as senior members of the Conservative party have handed in letters of no confidence to the 1922 Committee, although it is still unclear how many letters have been submitted, the threats of a leadership challenge are growing. The biggest concern for the pound at present is PM May’s ability to get parliament behind her deal to alleviate the current level of uncertainty.
This morning Michael Gove has confirmed he will not be resigning from the cabinet, following rumours his departure would be next after turning down the position of Brexit secretary. Seen as a vote of confidence for the PM the pound has made advances against the single currency from a low of 1.1264 to 1.1319 at time of writing. Elsewhere final CPI and final core CPI for the eurozone was released, figures came in as forecast at 2.2% and 1.1% respectively. Minor US and Canadian dollar releases are due out in the afternoon, however for the short term investors focus will likely remain on Brexit.