Pound Sterling Declines As Forty Tory MPs Say No To May

The UK pound declined on Monday following a report that forty Tory MPs are planning to sign a letter of no confidence in Prime Minister Theresa May.

The report increased the uncertainty surrounding ongoing Brexit talks as European Union representatives are already threatening to block trade talks until the U.K agrees to pay the Brexit divorce bill.

This political uncertainty put the prime minister’s ability to deliver Brexit in question as both the Labour and other opposition parties warned that May no longer has the needed authority over her own party to secure Bill’s passage.

“Over recent weeks, it has become increasingly clear that you alone do not have the authority to deliver a transitional deal with Europe and to take the necessary steps to protect jobs and the economy,” Labour’s Shadow Brexit Secretary Sir Keir Starmer said in a letter to the Prime Minister.

Even though the U.K. economic fundamentals have proven to be resilient in recent times, the uncertainty surrounding Brexit negotiations continues to hurt new business investment and confidence in the region.

The pound dipped 0.7 percent against the US dollar on Monday to $1.3100, which further validates our bearish position on GBP/USD. We expect a sustained break of 1.3046 to open up 1.2868 as explained last week.