The pound’s strong start didn’t last long, with the currency retreating from its early levels as Brexit complications began to weigh.
Initially sterling had shot half a percent higher against the dollar as news that US Special Counsel Robert Mueller subpoenaed more than a dozen of Trump’s campaign staff back in October quickly undid the gains the greenback had managed after House Republicans passed their tax plan. Now cable is flat, the wrong side of $1.32, and not because of any great recovery from the dollar, which is down 0.3% against the euro and 0.4% against the yen.
No, it seems that the continued Brexit discord between the UK and the EU, as well as the generally depressing situation the country’s consumers find themselves in following the week’s data, is dragging sterling lower. The currency paired its limp showing against the dollar with a 0.3% decline against the euro, sending it back towards €1.1175.
Interestingly none of this could substantially help the FTSE. While the UK index did erase its initial losses, at 7390 it’s only 30 or so points off of its recent 6 week lows. The FTSE is not only contending with a smattering of red in its commodity stocks, but chunky losses for United Utilities (LON:UU) and Severn Trent (LON:SVT), which plunged 4.3% and 2.2% respectively after the former received a broker downgrade from HSBC.
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