The Pound exchange rate has slumped against other majors, not helped by US President Donald Trump’s comments that Theresa May’s withdrawal agreement ‘looks like a good deal for the EU’. The President said it would prevent the UK from trading with the US. Trump’s comments come at a time when Theresa May is trying to gain support for her deal before it’s voted on in December, and it’s been rumoured only two more letters of no confidence would need to be submitted to the 1922 Committee for a vote of no confidence to take place. Markets took Trump’s comments to be significant, and The Pound to US Dollar (GBP/USD) exchange rate hit levels of 1.2733, almost a cent lower than the session high of 1.2819. The Pound to Euro (GBP/EUR) exchange rate is trading at lows of 1.1261, after session highs of 1.1306.
UK politics look set to continue to set the tone for the Pound exchange rate in the near future. Today, Theresa May has said she wants a TV debate with Labour leader Jeremy Corbyn ahead of the Commons vote on the Brexit deal.
‘I am going to be going out and round the country. I am going to be talking to people. I am going to be explaining why I think this deal is the right deal for the UK – and yes, I am ready to debate it with Jeremy Corbyn. Because I have got a plan. He hasn’t got a plan…’
Meanwhile, across the pond, Trump has been creating problems for the tech industry with threats to impart steeper tariffs on Chinese goods, like iPhones. Spokesperson for the Information Technology Industry Council, Jose Castaneda, commented:
‘Imposing a new round of tariffs would cause a shock that will reverberate across America and the globe. It would further threaten global supply chains, leading to higher prices for the electronic devices people rely on every day and even the loss of American jobs.’
There had been hopes that the US and China could reach an agreement at the Group of 20 (G20) meeting being held later this week, but Trump has now deemed that ‘highly unlikely’.
— Fercan Yalinkilic (@FercanY) November 27, 2018
Update: As the session continued, Sterling continued to slip lower across the board. GBP/USD fell by around -0.48% while GBP/EUR sank by 0.39%. However, while Sterling was driven by Brexit, UK retail sales took an upswing. The Confederation of British Industry’s (CBI) Reported Sales reading shot to 19 in November, far higher than the previous month’s 5 and forecast 10. However, the CBI’s distributive trades survey showed that retailers believed sales would pick up next month, but the general business situation for the next three months would deteriorate.
UK CBI retail survey: ️
• Sales rise more than expected in Nov
• Business expectations joint-weakest since 2012
— Andy Bruce (@BruceReuters) November 27, 2018
The GBP/USD exchange rate is currently trending at 1.2753. The GBP/EUR exchange rate is trading at 1.1271.