The dollar’s comeback picked up steam this Tuesday, with the greenback continuing to force its rivals to give back ground gained in the last couple of months.
The previously cocky pound suffered most: cable dropped another 0.6%, forcing sterling below $1.40 for the first time in a week. A lot of the currency’s weakness – it has also fallen 0.2% against the euro to hit a sub-€1.135, 8 day low – stems from the week’s early focus on Brexit, and the innumerable issues attached.
Yesterday it was all about Theresa May’s shaky position atop the Tory party and the UK’s lack of ability to secure an EU divorce bill. Today, however, investors are concerned about a leaked cabinet report highlighting the myriad ways Brexit will be bad for the UK economy, regardless of whether Britain comes out the other side with a wide-ranging free trade deal, single market access or no deal at all.
Despite the pound’s weakness the FTSE has found little to be happy about. With a bunch of red commodity stocks – Brent Crude and copper fell 0.8% and 1.1% after the bell – the UK index found itself down by 25 points, sending it back below the 7650 mark it had strained to keep hold of on Monday.
As for the eurozone, they weren’t in a good move either, with the DAX and CAC slipping 0.3% and 0.1%, ignoring the euro’s 0.3% drop against the dollar to focus on the currency’s gains against the pound, and the Dow Jones’ late night slip on Monday.
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