Sterling today lost ground as more pressure mounted on the Government as Priti Patel left her role this morning. Theresa May has replaced Mrs Patel, who was International Development Secretary with Penny Mordaunt who has moved over from her role as the Minister of State for Disabled People, Health and Work. Whilst this appointment appears to have been taken well, this is the Government’s second ministerial change in as many weeks following the resignation of Michael Fallon last week.
Currency markets are completely driven by opinions and constant changes in the Government will certainly not be helpful for Sterling. The UK Government currently have all their resources focused on trying to negotiate a Brexit deal. The Paradise Papers Scandal and Priti Patel’s apparent abuse of powers will only contribute to weakness. The outcome of continuous scandals could result in a vote of no confidence with Theresa May.
UK Data Tomorrow
Tomorrow there will be a release for production data with Industrial production set to improve for both year on year and month on month. This could help Sterling make back some of the lost ground against the Euro mainly.
Tomorrow the NIESR (National Institute of Economic and Social Research) GDP data estimate will be released which looks over the last three months. The last quarter UK GDP grew when there was expected to be a loss, tomorrow should it look like there will be further growth between now and the end of the year Sterling could receive a boost. The GBP/EUR rate has jumped up on Friday afternoon in the last few weeks as investors look to take their positions out the market before the weekend. The small gains received for the Euro at the end of this last week might see people sell their positions of helping Sterling to rise back above 1.13 tomorrow afternoon.