The Pound had its worst week last week, having ended near its 2019 low after the Labour party halted the cross-party Brexit talks. Opposition leader Jeremy Corbyn said they have “gone as far as they can” and his party would continue to oppose Theresa May’s Brexit deal at the vote tabled for the week commencing 3 June.
Sterling trading closed at $1.2715 and will now rely on any positive sentiment around Brexit to buck the trend and get a push. However, with the UK prime minister offering to depart after the next vote on the Brexit deal and ‘Leavers’ MPs waiting in the wings to hold a leadership contest, the fears of a no-deal Brexit are beginning to resurface and could weigh further on the Pound.
The Sino-US trade war appears to be escalating further. US intelligence chiefs held briefings with domestic companies to warn them of the dangers of doing business in China. The sessions, which came just a week after Donald Trump banned US firms from trading with Chinese telecoms giant Huawei, highlighted the risks of cyber attacks and intellectual property theft.
However, last Friday, 17 May the US president delayed increasing tariffs on automotive imports by six months, despite stating that foreign vehicle imports posed a threat to US national security. The US also reached an agreement with Canada and Mexico to remove tariffs on steel and aluminium, suggesting that despite the tensions with China, Trump is in a deal-making mood.
The week begins light on data, ahead of UK retail sales and EU consumer confidence figures tomorrow. Brexit will continue to dictate the tone for the week.
May promises to leave after Brexit vote in June
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Data provided by