The Pound recorded its ninth consecutive weekly loss against the Euro ahead of the weekend, and it recorded its lowest weekly close against the U.S. Dollar since April 2017.
The weakness extends to the majority of major currencies, as a multi-week sell-off extended amidst a combination of political uncertainty and deteriorating economic data continues to weigh.
For Sterling, it's not just the Brexit deal/'no deal' equation that is injecting confidence-sapping uncertainty into the market: the prospect of a General Election is another factor at play with news that the Conservative party are gearing for a General Election before the year is out.
This is news that will do little to boost confidence in the UK currency.
The Financial Times reported Friday that "Conservative MPs are spending the summer preparing for a snap general election, claiming that if Boris Johnson becomes prime minister he will either be forced to go the polls or decide to take a gamble to increase his majority."
Even in pre-Brexit times, impending elections did tend to inject uncertainty into the market and contribute to underperformance by Sterling.
This would leave the Conservatives with a working majority of just three, which is surely unsustainable for a Prime Minister looking to push through the House of Commons perhaps the most important legislation in a generation.
Gillian Keegan, Chichester MP, told the FT: “There’s a scenario [where] an election could be called in early October. There are a lot of people who think there will be an autumn election.” She said she was preparing literature and reviewing her campaign structure."
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Written by Gary Howes