Pound sterling falls to six-week low as Theresa May's Brexit approach attacked by Conservative MPs

Analysts said the currency had been 'spooked' ahead of the Prime Minister's meeting with Tory rebels on Wednesday

Caitlin Morrison
Wednesday 24 October 2018 14:54
Theresa May delivers Brexit statement to MPs

Pound sterling fell to a six-week low against the dollar on Wednesday, as Theresa May fought to win over Tory party colleagues who disapprove of her approach to the Brexit negotiations.

The pound dropped 0.5 per cent to $1.29, the lowest level since early September.

Connor Campbell at Spreadex said sterling’s downward trajectory was “unsurprising”.

“It appears that the currency has been spooked by Theresa May’s impending meeting with the 1922 Committee of Tory backbenchers, with whom the PM hardly has the best relationship with at the moment (even before the rather violent comments reported in the papers over the weekend).

“The outcome of that address may impact how the Brexit negotiations move forward – or don’t, as the troublesome case may be.”

Over the weekend, media reports emerged with Tory rebels using aggressive and violent language to attack the prime minister, including one who warned that Ms May should “bring her own noose” if she decided to come to the 1922 meeting.

MPs were quoted as saying she was now entering “the killing zone” and that “assassination is in the air”, while another unnamed Tory was quoted as saying: “The moment is coming when the knife gets heated, stuck in her front and twisted. She’ll be dead soon.”

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Ms May confirmed on Tuesday that she would meet with the backbench 1922 Committee.

David Cheetham, chief market analyst at broker XTB, said: “May’s position is similar to that of the pound in that it seems to be carrying on despite the sizable challenges faced.

If May was toppled the pound would see a wave of selling in the short-term since her replacement could increase the chances of a no-deal Brexit, Cheetham added.

But the pound “remains more sensitive to good news than bad which may mean a fairly sharp move higher should a [Brexit] agreement be reached.”

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