Daily Currency Update

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Brexit woes mean sterling woes

GBP - British Pound

A daily update almost isn't enough at the moment with Brexit twist and turns becoming more and more frequent once again. Yesterday a series of crunch cabinet meetings put more pressure on the Prime Minister with some analysts predicting she won't see out the bank holiday, let alone make it to June. The resignation of the high profile and very influential Andrea Leadsom (a one time leadership rival to May) from the cabinet late last night has added more pressure to the PM.
As the polls open this morning the pound is on the back foot once again hitting fresh 6 month lows against the USD and with the Conservative Party expected to perform poorly tomorrow's meeting between the PM and Sir Graham Brady, head of the influential 1922 Committee, will be very important. The exact date of May's departure in many ways is irrelevant and it does not matter if its this weekend, June, or there after. What is critical for the pound and for businesses across the UK and Europe is who comes in afterwards, what their policy is towards the EU and whether they have the authority to ask for a re-negotiation or extension. Even a general election can't be ruled out. Until the market emerges from all of this political fog and mist sterling could struggle to return to its now seemingly giddy heights of 1.30.

Key Movers

It isn't just the UK that go to the polls today, of course the rest of Europe will also go to the polls over the next four days as well. Over 400 million people will be eligible to vote as they decide on over 700 MEP seats, quite a mammoth undertaking. However, compared to the Indian elections the numbers seem minute. Indian elections, which last 38 days, sees 900 million people who are eligible to vote doing so at 1 million polling stations.
In Europe a wave of anti-EU sentiment and populism could sweep across the elections with some investors forecasting a weaker Euro on Monday as a result.

Expected Ranges

GBP/USD: 1.2600 - 1.2780 ▼

GBP/EUR: 1.1313 - 1.1420 ▼

GBP/AUD: 1.8305 - 1.8425 ▼

GBP/NZD: 1.9350 - 1.9500 ▼

GBP/CAD: 1.6900 - 1.7020 ▼