British pound drops to a 3-month low

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May 16, 2019 6:14pm NYSE:FXB

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From Despite repeated parliamentary votes to rule out the prospect of the U.K. leaving the European Union without a deal in place to govern its relationship with the bloc, the revived threat of a “no-deal” Brexit put renewed pressure on the British pound Thursday.


Sterling changed hands at $1.2797 versus the U.S. dollar GBPUSD, +0.0156%  in recent trade, near its lowest since Feb. 18 and leaving the currency on track for a 1.6% weekly slide.

British Prime Minister Theresa May is expected to again attempt to push her Brexit plan through the House of Commons in early June. Versions of her plan have faced multiple rejections. Lawmakers have also rejected the prospect of a no-deal Brexit, but such a scenario still can’t be ruled out.

May on Thursday resisted pressure from Conservative lawmakers to set a date for her resignation but agreed to provide a timetable next month for her departure.

“Another failure will almost certainly mean Theresa May is out. The big question then is who will take her place?” said Jasper Lawler, head of research at London Capital Group. “Pound traders are growing increasingly nervous that Theresa May will be replaced with a hard-line Brexiteer. This means the chances of a softer Brexit are fading and dragging the pound lower.”

The U.S. dollar, meanwhile, was mostly higher versus major rivals in slow trade. The ICE U.S. Dollar Index DXY, +0.28% a measure of the currency against a basket of six major rivals, was up 0.3% at 97.839.

The euro EURUSD, -0.0268%  fetched $1.1175, down from its late Wednesday level of $1.1204. Against the Japanese yen, one U.S. dollar bought ¥109.85, up from ¥109.59.

The dollar remained largely positive after a round of economic data, including a rise in the Philadelphia Fed’s May manufacturing index to a four-month high, a fall in first-time U.S. jobless claims and a rise in April housing starts.


The Invesco CurrencyShares British Pound Sterling Trust (FXB) was unchanged in after-hours trading Thursday. Year-to-date, FXB has declined -5.43%, versus a 8.24% rise in the benchmark S&P 500 index during the same period.

FXB currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #13 of 16 ETFs in the Currency ETFs category.


This article is brought to you courtesy of .


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