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Pound splutters on political jitters after May speech

Prime minister's poorly-received speech yesterday sparks sell-off of pound, on fears of political instability.

 
Pound splutters on political jitters after May speech

The pound has fallen against the dollar on fears over political instability, after Theresa May's poorly-received speech at the Conservative party conference yesterday raised fears over her ability to cling on as prime minister.

After relatively steady trading yesterday, the pound today dropped 0.9% against the dollar to trade at $1.313, while the euro rose 0.5% to 89.2p.

'The Tories prove toxic for the pound once again,' said Kathleen Brooks, research director at City Index.

'The market seems to be ignoring some fairly solid economic data, progress, albeit slow, in the Brexit talks, and a weaker dollar in favour of politics,' she added.

'After Theresa May's speech at the Tory party conference on Wednesday, there are rumours that she will be asked (forced) to step down by her own party. The prospects of a leaderless UK in the middle of the Brexit process, or even worse, a prime minister Boris, are right to unnerve sterling traders.'

Paresh Davdra, chief executive of RationalFX, said traders would be looking to the Bank of England to provide support for the pound.

'However, it remains to be seen if the UK's data is strong enough to support a more hawkish policy from the Bank as is widely anticipated from investors,' he said.

The pound's fall helped to lift the FTSE 100, which rose 27 points, or 0.4%, to 7,495.

A weak pound tends to support the index, whose members rely on overseas markets for around three-quarters of their earnings.

Merlin Entertainments (MERL) was the biggest riser on the index, up 3.1% at 462.5p, after Reuters reported the theme park operator had made a bid for part of US group Seaworld (SEAS.N).

Miners were meanwhile buoyed by a rise in metal prices to near multi-year highs.

Antofagasta (ANTO) rose 2.7% to £10, Glencore (GLEN) was up 2.7% at 369p, Anglo American (AAL) added 2.6% to £14.68 and Rio Tinto (RIO) traded 1.7% higher at £36.78.

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14 comments so far. Why not have your say?

Micawber

Oct 05, 2017 at 15:41

The Conservatives' capacity for self-destruction, taking the country with them, is remarkable, outweighing even Labour's capacity for self-destruction, taking the country with them! I look forward to the day when we are governed by intelligent robots. At least they would be intelligent.....

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colin overton

Oct 05, 2017 at 16:41

"The Tories prove toxic for the pound once again,' said Kathleen Brooks" Kathy, just wait until the Kommissar gets in, there'll be 3 to the euro.

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cliff aner

Oct 05, 2017 at 16:45

And on top of that they disappear when things go wrong--Cameron after the referendum and Davis reputedly after the negotiation--whatever the result??

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Mark Stringer

Oct 05, 2017 at 16:53

Colin Overton, spot on. Lot of people have conveniently forgotten what that tyke Blair and pals did to this country.

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Mark Stringer

Oct 05, 2017 at 16:59

When did the adults leave the country. We’ve turned into a nation of spineless jellyfish.

The persistent reporting of absolutely sod all.

What would happen if war broke out. The gibberring wreaks would soil themselves.

I loathe politicians but all this twaddle is getting too much.

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an elder one

Oct 05, 2017 at 17:21

May is the daughter of a vicar, and it shows; Hammond a bean counter and it also shows - no imagination; Davis has had, or will have had enough of it all; the other contenders I can't be bothered to think about: daresay we do need a second coming of a Churchhill; let us pray.

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an elder one

Oct 05, 2017 at 17:25

I should have added, with the exception of Boris J

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JohnnyM

Oct 05, 2017 at 17:55

Teresa was - and appears still to be - the only one sane and strong enough to do this job until after Brexit. I thought that had been made abundantly clear to all Conservative MPs earlier this year. They need to shut up and put up and get behind their government, and STOP talking to the media - especially Kuenssberg and the rest of the BBC. And that includes Boris.

Today's £ movements again confirm the irrational (and probably speculative) nature of the world's currency markets, and question whether the world can afford a completely "free market" without proven transaction need..

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Duncan jones

Oct 05, 2017 at 18:03

If we must confront a leadership upheaval........Hammond seems the safest pair of hands and hopefully with just enough imagination to appoint a cohesive cabinet. Boris has missed his chance I fear. What must Her Majesty be thinking?

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RL

Oct 05, 2017 at 18:34

@JohnnyM £movement is not irrational. Tory incompetence will open the way to Corbyn. Markets will move to price that in.

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JohnnyM

Oct 05, 2017 at 18:51

RL, it's not going to happen. There is 0% chance of Marxist Jeremy getting into power in the next 2-3 years. Even currency hedging doesn't have 2-3 year options. If the Corbynistas are close to winning an election, of course the world will come crashing down on their heads, but it ain't gonna happen in the forseeable future.

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Mark Stringer

Oct 06, 2017 at 12:38

On the front page of Private Eye this fortnight; Is Jeremy Corbyn a cult? Obviously a typo.

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Jeff Liddiard

Oct 09, 2017 at 16:15

Is anyone else having problems accessing the forum? Last post appears to be 15:32 on 5th October. I've sent a message to CityWire but had no response.

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cliff aner

Oct 09, 2017 at 19:37

Yes same problem no replies for 4 days

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