This has put pressure on the US-UK relationship following this weekend’s leak of the British diplomat Sir Kim Darroch’s comments that Mr Trump was “inept” and “dysfunctional”. Mr Trump tweeted yesterday: “I have been very critical about the way the U.K. and Prime Minister Theresa May handled Brexit. What a mess she and her representatives have created. We will no longer deal with [British ambassador Kim Darroch]. The good news for the wonderful United Kingdom is that they will soon have a new Prime Minister.”
As the US is one of the UK’s closest international allies, this is likely to cause difficulties for the new Prime Minister amid continuing post-Brexit trade concerns.
Liam Fox, the International Trade Secretary, came down hard on the leaker: “This is such a damaging … event that I hope the full force of our internal discipline, or even the law, will come down on whoever actually carried out this particular act.”
The pound was also undermined today by the publication of the annual BRC like-for-like retail sales figures for June.
The annual rate of growth slowed to 0.6 percent – the lowest reading since records began.
Helen Dickinson, a Chief Executive at BRC, was downbeat, saying: “Overall, the picture is bleak: rising real wages have failed to translate into higher spending as ongoing Brexit uncertainty led consumers to put off non-essential purchases.”
Later on today Fed Chairman Jerome Powell is due to deliver a speech.
After last week’s better-than-expected US jobs report, Powell’s comments may be more upbeat.
Although a US rate cut is expected in July, expectations of an aggressive policy stance have been tempered by Friday’s job’s data.
Any indications that rate cuts won’t be as aggressive as initially feared would be US dollar-supportive.