May resignation sends Sterling tumbling

The resignation of Prime Minister Theresa May on Friday provided the biggest fireworks of the week in currency markets. The decision and the subsequent leadership fight within the Tory party increase Brexit uncertainty and markets reacted by making Sterling the worst-performing major currency of the week.

Prime Minister May announcement that she was resigning overshadowed a week of decent macroeconomic developments in the UK. Retail sales continue to grow at a healthy clip and core inflation remains well anchored just below the 2% level. This week is a quiet one on the economic front. Markets will remain focused on the Tory leadership struggle and the fallout from European elections over the weekend where both of the main parties performed very poorly. We are increasingly of the view that the Brexit impasse cannot be resolved without a general election and a new Parliament.

GBP/PLN (20/05/19 - 28/05/19)

Source: Bloomberg Date: 28/05/19

Author: Enrique Diaz-Alvarez, Chief Risk Officer at Ebury

Keywords Ebury, GBP