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GBP Hits 10 Day Low Vs USD

Sterling fell on Monday to a 10-day low against the stronger dollar after the United States and China agreed at the G20 summit in Japan to restart trade talks.

The pound slipped 0.3%, bringing losses since early-May to about 4.5%. Against the euro, however, sterling firmed to approach one-week highs. The currency had fallen to nearly six-month lows last week.

Adding to sterling weakness are worries that Britain might still leave the European Union with no transition agreements in place. Jeremy Hunt, in the running to become Conservative Party leader and the new U.K. prime minister, is due to say later in the day that he is willing to countenance a no-deal Brexit.

Moreover, “the market is concerned that whoever wins the Conservative leadership will not have much time to get something different from (Theresa) May’s deal” to put in front of the U.K. parliament.

The proportion of British manufacturers reporting a rise in their domestic orders has fallen to its lowest in seven years as Brexit uncertainty and the global slowdown take their toll, a leading employer’s group have said this morning.

Factories also showed the weakest picture for export orders in four years in the April-June period while a slight pick-up for services firms was not strong enough to make up for a weak start to the year, the British Chambers of Commerce said.

These results indicate that underlying economic conditions in the UK remain decidedly downbeat.

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