Sterling’s wary start transformed into a full-blown wobble as Thursday progressed, a spate of post-draft deal resignations dragging the currency lower.
The moment the pound heard that Dominic Raab had quit, the Brexit Secretary claiming he was unable to back Theresa May’s Brexit plans, things went haywire. Add onto that the subsequent departure from Work and Pensions Secretary Esther McVey and a far worse than forecast October retail sales reading and sterling stood no chance; if anything, it has done well not to fall even further.
Against the dollar it shed 1.4%, with cable plunging back towards $1.281, while against the euro it shed 1.5%, tumbling to €1.132.
In a sign of how worrying the latest Brexit developments actually are, the FTSE took none of its usual pleasure in sterling’s decline. Instead the UK index erased its initial gains as the housing, banking and retail sectors all nosedived, only just kept afloat by a decent showing from its commodity stocks, especially Fresnillo (LON:FRES) and Randgold Resources (LON:RRS).
Turning to this afternoon and it is hard to see the US open really changing much for the domestic-focused UK markets. Still, the Dow Jones is set to climb 0.3% when the bell rings on Wall Street, a move that would just about put it back across 25100, having continued its Apple-led (NASDAQ:AAPL) decline on Wednesday night.
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