This follows the announcement that Prime Minister Theresa May would go ahead with another vote on Brexit in early June, despite a lack of consensus emerging from cross-party talks. A spokesman for the Prime Minster said: “[She is determined] to bring the talks to a conclusion and deliver on the referendum result to leave the EU.” This has provided some relief for Sterling traders today, for with the promise of a vote many are hoping that there could be a break in the political stalemate between the two parties.
However, yesterday’s intense pressure from Tory backbenchers to abandon talks with the Labour Party over concerns that a compromise would be drawn with Labour over the customs union, has tended to weigh on market sentiment in the pound.
There are no UK economic data releases due today, with most pound traders instead focusing on the ongoing Brexit saga.
Hopes, however, are fading that there will be a cross-party compromise.
Meanwhile, the US dollar has stabilised despite the ongoing US-China trade tensions.
Yesterday saw President Donald Trump announce that a deal would be made between the two economic superpowers, “when the time is right”.
China’s President Xi Jinping seemed to hit out against the US in a speech, when he seemed to infer the recent bout of disagreements between the two nations was a serious matter.
He said: “All countries should conduct exchanges beyond borders of state, time and civilisations, and work together to protect the peaceful time we have, which is more precious than gold.”
US dollar traders will be awaiting the publication later of the US retail sales figures for April, which are expected to ease.
These will be followed by the US industrial production figures for April, which are expected remain flat at 0.0 per cent against March’s -0.1 per cent.
The pound US dollar exchange rate will remain sensitive to Brexit today.
With the diminishing hopes of the two major parties agreeing, or arriving at a compromise, doubts are likely to continue to weigh on Sterling.