Sterling rose on Thursday to the highest in more than a week, supported by news that the opposition Labour Party was mounting a bid to bring down Prime Minister Boris Johnson and stop him taking Britain out of the EU without a deal.
The currency also was lifted by better-than-expected retail sales, which came on the heels of Wednesday’s higher inflation numbers that raised hopes the economy might be in better shape than previously thought.
Labour said it would call a vote of no-confidence in Johnson’s government as soon as it believes it can win it and would form a temporary government under leader Jeremy Corbyn to delay Brexit.
While derivatives indicate market players may be trimming back some short sterling positions, the currency’s prospects remain clouded by the risk of Britain exiting the European Union without a divorce agreement at the end of October.
By 15:30 GMT, the pound was 0.5% higher at $1.2136, having briefly touched a high of $1.2150. However it remains not far from the 31-month low of $1.2015 it reached on Monday.
Source : Reuters