Spreadex Market Update
Cross-party talks collapse forces cable to 4-month-plus low
The pound was further chipped away at on Friday, the Brexit cross-party talks finally coming an end as Jeremy Corbyn claimed in a letter to the prime minister that they had ‘gone as far as they can’.
Though the writing has been on the wall for a while, the confirmation that the previously extended Brexit olive branch between Labour and the Tories has now been rescinded was still a blow to sterling. One of the key sticking points appeared to be the imminent departure of Theresa May and the doubts that raises over the willingness of the future PM, whoever that may be, to ‘deliver on any compromise agreement’.
Following the news the pound dropped 0.3% against both the dollar and the euro. That puts cable at $1.275 – a level last seen more than 4 months ago – while against the euro sterling sank to a fresh 3-month low of €1.142. That did help ease the FTSE’s own losses, the UK index now down just 0.2%.
Turning to this afternoon and, with the DAX down 0.8% and the CAC slipping 0.4%, the Dow Jones is set to continue the session’s pull back. The futures have the index falling 100 points after the bell, taking it below 25750 having briefly touched 25950 on Thursday.
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