A rally in the pound yesterday afternoon on reports of a breakthrough in the Irish border dispute has proved short lived with sterling coming back under pressure today and falling below the $1.30 handle. The GBP/USD cross is now back near the lows seen at the beginning of the month and on a trade weighted basis the pound has actually hit a 6-week low. Politics continues to weigh on the pound with Theresa May’s position remaining under near constant threat as she is set to address Tory MPs later today with calls growing for her to be replaced.
Should this happen then it would likely see a wave of selling in the short term as her replacement is seen as pushing towards a “harder” Brexit. Having said that May’s position is similar to that of the pound in that it seems to be carrying on despite the sizable challenges faced. This could well be telling as the currency has held up pretty well considering and it seems to remain more sensitive to good news that bad, which may mean a fairly sharp move higher should an agreement be reached.
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Shares in London have looked to stabilise this morning with the FTSE 100 higher by a little over 20 points on the day as the benchmark has found a little support around the low of 6925 from earlier this month. Investors will be hoping this level can hold and provide a floor going forward as a break below would see the market slump to a 7-month low. One of the best performing stocks is Barclays with shares rising more than 2% after a pleasing set of results. Largely thanks to a big jump in revenues from its trading operations the bank posted a net profit of £1B for the quarter - almost double the £583m seen for the same period last year. The figures are comfortably higher than the £784m analysts had forecast for the bottom line although the top line did miss, with revenues of £5.1B below the £5.2B expected.
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