Political difficulties weigh on GBP
Mihir Kapadia – CEO and Founder of Sun Global Investments
Prime Minister Theresa May is in a difficult spot as rebels in the party seem to gather support to call a leadership election. With a difficult time at the Conservative Party Conference podium two days ago, the Prime Minister did not strengthen her position as she had hoped.
The political difficulties for the ruling party in the UK has put pressure on the GBP, losing ground to its peers. The Pound is already on a four week low, falling by 0.4 per cent against the Euro to €1.12, and 0.9 per cent against the Dollar to $1.31.
The euro edged slightly higher in Asia after falling 0.5 per cent yesterday to $1.1704 amid continued political uncertainty in Spain. Investors still think the ECB will continue to gradually reduce its bond-buying programme. The ECB September meeting minutes released was broadly consistent with this view.