Sterling hit a four-month low on Friday after cross-party Brexit talks collapsed. Concern grew about the impact Prime Minister Theresa May’s likely resignation would have on Britain’s exit from EU.
Sterling was down for a tenth consecutive session, touching a four-month low of $1.2755. Besides, it slides 0.3% against the euro to 87.55 pence, the lowest since February 15.
It is now set for its worst week since October 2018. A further fall would make it one of the worst weeks in well over a year.
The pound has traded in a narrow range of $1.29-1.32 since Brexit was delayed in late March. However, following weeks of talks between May’s Conservatives and the opposition Labour Party that yielded nothing the currency has slumped.
Parliamentarians are likely to again vote against her thrice-rejected EU withdrawal agreement. Next week’s European parliamentary vote is another cause for concern. Nigel Farage’s Brexit Party is on course to pick up 34% of the vote, more than the Conservative and Labour parties combined.
START TRADINGForex – Worst week in 2019 for Sterling
The U.S. dollar has also benefited as a safe-haven currency even with the United States and China locked in a trade dispute. It was bolstered on Thursday by data that showed U.S. homebuilding increased more than expected in April. On Friday, the greenback held near a two-week high against its peers, supported by the strong data and a bounce in Treasury yields. The dollar index against a basket of six major currencies reached 97.921, its highest since May 3.
The Japanese yen strengthened on Friday, attracting safe-haven buying amid concerns over trade tensions and impending European Parliament elections. The Japanese currency was up 0.3% on Friday against the dollar at 109.58 and is up around 1.3% this week.
The Australian dollar extended overnight losses and fell to a 4 1/2-month trough of $0.6883. The Aussie dropped to its lowest level since Jan. 3 on the escalating trade tensions.
The euro, meanwhile, is under pressure from worries about next week’s European parliamentary elections and comments from Italian Deputy Prime Minister. The euro dropped to its lowest since May 6 and was a touch lower at $1.1158 EUR=EBS, down 0.6% this week.
Gold price were mostly unchanged on Friday after a steep fall in the previous session. Gains curbed by a firmer dollar and a pullback in global equities on U.S.-China trade tensions offering support. Spot gold was steady at $1,285.67 per ounce as of 1158 GMT.
Silver is also on track for a decline of about 2% for the week.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money