Sterling dips as Brexit concerns scupper rally

Monday, 4 June 2018 23:40 WIB



Sterling fell on Monday as concerns about Brexit clouded the outlook for the currency after a brief rally encouraged by stronger-than-expected data on Britain's construction sector.

The pound fell 3.43 percent versus the dollar in May, its biggest monthly decline since 2016, as weakness in the UK economy and non-UK factors including new U.S. trade tariffs impacted the currency.

Sterling started June on the front foot, buoyed by data showing signs of a possible strengthening of the British economy after a sluggish first quarter.

Early in Monday’s session, sterling hit a seven-day high of $1.3398, amid broad dollar weakness and a purchasing managers’ index (PMI) for Britain’s construction sector that showed activity at 52.5 for May, higher than 52 predicted by analysts.

But the pound later relinquished all of its gains and fell 0.3 percent to $1.3305. It also slid half a percent against the euro to 87.85 pence as the single currency rallied on receding worries about a political crisis in Italy.

Analysts said the pound’s decline was partly due to a flurry of headlines about Brexit and Britain’s future EU ties.

Source: Reuters


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