Fundamental Comment

Pound slides to new six-month low after Labor Corbyn comments

Pound slides to new six month low after Labor Corbyn comments

The pound slumped to a new low on Tuesday on renewed Brexit concerns after the opposition Labor Party announced that the next British Prime Minister should present his plan to the people in a referendum.

The pound sterling hit its lowest level six months at $1.2439, after dropping 0.5 percent, which the lowest level since January 3 -when the pound went down to 1.2397.

Not only against dollar, but the pound also fell versus the euro by 0.33 percent, pushing the EURGBP pair up to a high of 0.9001, the highest since January 11.

Leader the opposition Labor Party Jeremy Corbyn said his party will wage a campaign to stay against "no Deal" or " a damaging Tory Brexit.”

The new PM "should have the confidence to put their deal, or No Deal, back to the people in a public vote," he revealed.

On the other hand, the closes candidate for becoming the next Prime Minister Boris Johnson persisted in taking Britain out of the EU on Halloween, with or without a deal.

Additionally, an economic report by the British retail sales (BRC) rereleased today added to concerns as the retail sales index continued to fall in June, dropping by1.6% on an annual basis.

The dismal data increased the likelihood of witnessing a weaker U.K. GDP reading in the second quarter, leaving investors with no option but to remain short on the pound.

Meanwhile, the dollar index, which measures the performance of the U.S. currency against a basket of major currencies, rose 0.1 percent to 97.488, the highest level in three weeks.

On Wednesday, investors will turn their attention to the Federal Reserve’ latest meeting minutes, as well as Fed Chair Jerome Powell’s testimony on the Semiannual Monetary Policy Report before the House Financial Services Committee. 

Share Article