Home » Currency Note » Currency Note » Currency Note GBP » GBP: pound drops to a fresh six-week low against the dollar

Theresa May is stuck between a rock and a hard place at the moment, with no apparent way of getting out at present. The Prime Minister cannot get her cabinet to agree to her proposals, so is therefore unlikely to get them through parliament. If she does (one of the biggest ifs there has even been), she then has to hope that EU leaders accept the proposals. Somewhat ironically, the last stage is probably the easiest, especially given the main barriers will have been overcome at that stage.

But it does not look as if she can ever hope to overcome those barriers at the moment. The government is divided on the best course of action, and the Commons is too. The markets realise all of this, which is why the pound sank to a fresh six-week low against the dollar yesterday. It performed better against the euro, but that was because the eurozone’s economy is being significantly affected by tariffs and trade wars.

UK finance mortgage approvals for September came in at 38,505 which was fewer than a downwardly revised 39,241 in August and below market expectations of 39,000. It is the lowest reading in six months and down 6.7% from the same month last year. It’s relatively quiet on the UK’s economic data schedule today, as attention will turn to the eurozone and US. However, Brexit-related news is released almost every day, so it would be a surprise if we don’t see some sterling movements on the back of any headlines.

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