Pound Slumps On Trump Brexit Scorn Impact

Published / Last Updated on 12/07/2018

Weak PoundIt has been well documented today that Donald Trump has arrived in the UK and in an interview with the Sun newspaper he said that:

Theresa’s May’s Brexit plan would “probably kill the deal” smashing any hopes of a trade deal between the UK and the US.  As he quote rightly intimates, if the UK is to align with EU regulations then the US would be negotiating trade terms with the EU and there would be little point in negotiating terms with the UK.  He also suggested that Mrs May was approaching the Brexit negotiations in the wrong manner and he had suggested he would take a “different route”. 

This sent the pound plummeting and a fall in confidence in political stability as this may strengthen Boris Johnston’s position and force a leadership contest, just when we need a stable, hard talking government.

Comment

You can guess the impact on UK stock markets.  A weak pound means most FTSE 100 companies, who earn their profits outside the UK, then convert those $ and € into weak pounds, meaning evening bigger sterling based profits.  FTSE 100 therefore climbed today and we expect the same tomorrow.  Add this to the yo-yo of increasing trade war sanctions, volatility is here for a while.


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