Pound sterling loses value after US president slams Theresa May’s Brexit plan

Mr Trump said soft Brexit would 'kill' chances of US-UK trade deal

Sterling dropped against the dollar on Friday morning, after Donald Trump said Theresa May's Brexit plan would "kill" chances of a US-UK trade deal.

The pound fell 0.61 per cent to hit $1.3126 in early trading, its worst price since the beginning of the month, and also dipped against the euro, tumbling to 1.1286.

Mr Trump told The Sun that he had advised Ms May against a soft Brexit strategy, but she “didn’t listen” to him.

Commenting on the Brexit plan reached at Chequers last week, he added: “If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.”

Jasper Lawler, head of research at London Capital Group, said Mr Trump’s remark “was a blow to both host Theresa May and the pound”.

“Let’s not forget that the hope of a quick trade deal with the US was a significant factor in Theresa May’s decision to invite Trump in the first place. Another embarrassment that May could have done without,” he said.

“Trump’s words of no deal have confirmed the fears of Brexiteers and will have stoked the fire in the hard Brexit camp, making Theresa May’s future in charge look doubtful once more. This fear was reflected in the pound as it dropped sharply in late night trading.”

Mr Trump and Ms May are set to hold a joint press conference on Friday afternoon. Mr Lawler added: “In the absence of any encouraging trade comments, gains in the pound going forward could be limited.”

The dip in the pound helped push the FTSE 100 up 0.7 per cent in early trading.