Sterling took another leg lower as looks like Theresa May will grimly cling on as PM despite a disastrous night for her. GBP dipped half a cent, slipping from a fairly comfortable looking $1.27 to $1.265 in pretty short order, and was last trading at $1.264 as it is on course for its biggest fall since October.
May stepping aside creates uncertainty, but trying to stay as leader looks like it may even more unpredictable and uncertain for markets. Political gridlock is the key here and this doesn’t look good for sterling.
FTSE futures are rising sharply as the pound is edges lower, and could open up more than 40 points.
It’s looking like it will be a lot more volatile as markets open with traders in London digesting the full meaning of the result. Meaningful trends might be hard to come by but we should expect plenty of volatility as investors seek direction.
Author: Neil Wilson, ETX Capital
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Pound Sinks More As May Said to Hold On