Sterling is stronger against the euro and the dollar this morning, possibly benefitting from the weakness of the other two currencies.
However, it’s clear that the pound is still vulnerable to Brexit fears. It was reported yesterday that after a meeting between Boris Johnson and Brussels diplomats, a chief European envoy said it was clear that Johnson had no intention of renegotiating the withdrawal deal. Mr Johnson also reportedly informed diplomats that no-deal is his ‘central scenario’.
The pound hit a new low against the euro yesterday and a 31 month low against the dollar, despite better-than-expected UK services data. Weakness is being priced in as we approach the 31st of October, due to the threat of a no-deal Brexit and a general election.
Services PMI was 51.4 in July, an improvement from 50.2 in June. A weak pound is said to have partly fuelled business activity in July
