Brexit drama continues. The sterling fell broadly on Wednesday and was on track for its longest ever losing streak against the euro.
Prime Minister Theresa May’s last-ditch Brexit plan failed to win over either opposition lawmakers or many in her own party. Forex traders said they saw a rising chance of Britain leaving the European Union without a transition deal.
The pound fell 0.3% to $1.2663, its lowest since mid-January, and weakened a similar amount against the euro to 88.135 pence. The sterling is set for its 13th straight day of falls against the euro. It is the longest such run since the euro began trading in 1999, according to Refinitiv data. With positioning broadly neutral, sterling has become more vulnerable to headline-driven selloffs.
Data on Wednesday showed British inflation rose last month by less than investors and the Bank of England had expected. However, it still hit its highest level this year, pushed up by higher energy bills. Yet, with politics dominating currency trading so heavily, there was barely any reaction from sterling.
Money markets now do not expect a BOE rate rise this year and are starting to price out 2020 hikes as well.
START TRADINGForex – Brexit drama sends sterling to new depths
Markets also waited for the Fed minutes, which are expected to give insights into the May 1 meeting.
The US dollar near one-month highs before Fed minutes. Trade tensions between the world’s two biggest economies remained high before Fed minutes. The dollar was broadly steady at 98.032 and just shy of a one-month high of 98.134, its highest since late April.
Elsewhere in the forex market, the euro was steady at $1.1162 before a speech by European Central Bank chief in Frankfurt.
The Japanese yen and the Swiss franc remained firm against the dollar. Risk appetite remained weak in the backdrop of festering trade tensions between the United States and China.
The sterling was the only notable loser in the European session. The British currency fell 0.4% to a fresh four-month low against the dollar at $1.2651..
Oil prices fell on Wednesday after industry data showed an increase in U.S. crude inventories. Demand concerns linked to a protracted trade war between China and the United States also weighed. Brent crude were down 17 cents at $72.01 a barrel by 1130 GMT.U.S. WTI crude futures for July delivery were down 46 cents at $62.67.
Gold prices eased on Tuesday after touching a more than two-week low in the previous session. Spot gold edged 0.1% lower to $1,275.81 per ounce at 0734 GMT. Last session, gold dipped to a more than two-week trough of $1,273.22.
Silver fell 0.3% to $14.43 an ounce, closing in on a more than five-month low of $14.33 of the previous session.
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Sources: Reuters, Investing, CNN money