Sterling suffered on Tuesday as optimism around a breakthrough in Brexit talks between the government and opposition parties began to fade amid growing pressure for Theresa May to give her resignation.
Parliament resumed from the Easter recess and as a result, so too did talks over finding a Brexit agreement that could win the support of lawmakers. However hopes soon fell away as the media reported that talks thus far had provided little or no headway, and the pressure on May to find a solution or to step down was growing. There was also reports that May could push for a fourth vote on her Brexit agreement in the next week or so, in an extremely high-risk method of breaking the deadlock.
The perceived march of Nigel Farage’s Brexit Party in the local elections has also hut her position within her party, with the influential 1922 committee calling for her to announce a resignation date. So far, polls have indicated heavy losses for the ruling tory party, and concerns have grown that she risks making them unelectable at the next general election.
The dollar was the big winner as financial markets re-opened yesterday, with traders pouring into the greenback ahead of Friday’s release of U.S. gross domestic product data for the first three months of 2019. The dollar was also supported by data that showed sales of new U.S. single family homes jumping to a near 1-1/2-year high in March. Friday’s important data release could see the case strengthen that the US is better placed than other leading economies.