Sterling retreats from six-week high amid Brexit uncertainty

Sterling trimmed earlier gains on Monday as punters took profits after a rally lifted the British currency to six-week highs thanks to surprisingly strong data and hopes that Britain will not crash out of the European Union without a deal.

Expectations of more political uncertainty also weakened the British currency after John Bercow, speaker of Britain’s House of Commons, announced that he would be standing down.

“The speaker has definitely been seen by many as supportive of those opposing no deal, so anyone coming in to a post where neutrality is so important would have to be less supportive,” said John Marley, a senior FX consultant at FX risk management specialist SmartCurrencyBusiness.

Trimmed gains

“On that basis no-deal chances just got a little bit stronger, hence the drop in sterling.”

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Against the dollar, the pound trimmed gains to stand up 0.3 per cent on the day at $1.2323. It jumped to a six-week high of $1.2385 in London trading after economic data beat forecasts.

Earlier, the pound received a rare boost from surprisingly strong economic data. Economic output in July alone was 0.3 per cent higher than in June, the Office for National Statistics said, marking the biggest rise since January.

– Reuters