The pound fell to a three-week low as newspaper reports speculated that U. Prime Minister Theresa May could face a leadership rebellion from within her own party following a disastrous speech Wednesday.
Sterling declined versus all of its Group-of-10 peers amid fresh selling interest by leveraged accounts and doubts about May’s premiership following her annual Conservative party conference speech. The prime minister’s policy announcements were overshadowed by mishaps including coughing fits, and up to 30 Tory lawmakers are now prepared to sign a letter calling for her resignation, according to the Telegraph.
“If sterling really has been sold today for fears of a rebellion, that may be short-lived,” said Nomura International strategist Jordan Rochester. “Tory rebels will likely remember the long game, which is to place all the blame from Brexit negotiation woes on Theresa and move on when 2019 presents itself.”
The pound fell 0.3193 as of 10:00 a. in London, after earlier touching $1.19 pence per euro. The yield on 10-year U. government bonds dropped two basis points to 1.
Leveraged accounts went bullish on the pound for the first time since May 2016 last week, according to Commodity Futures Trading Commission data. With the market now net long on the currency, it is “likely stops rather than fresh positions” triggering the move lower, Rochester said.
— With assistance by Vassilis Karamanis.
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