Prime Minister May confirmed that she would resign as Conservative Party leader on June 7th.

Reservations over the US growth outlook continued to hamper US sentiment following last week’s weaker than expected PMI data with benchmark bond yields close to 19-month lows.

The dollar was still protected by weak sentiment towards other major currencies with a slight net recovery as Monday’s US and UK holidays limited activity.

On-going political concerns continued to undermine Sterling support.

Global equities secure tentative gains on hopes for a moderation in US trade rhetoric. Oil prices partially recovered from last week’s losses as supply concerns persisted. A subdued dollar helped underpin precious metals, although gold gains were limited.

UK retail sales were unchanged for April, above expectations of a 0.3% decline, although underlying sales declined slightly. There was a weak reading for the May CBI retail sales survey, although companies were expecting a recovery for June.

Prime Minister May confirmed that she would resign as Conservative Party leader on June 7th. After initial selling pressure, Sterling was able to secure a tentative recovery on short covering following sustained losses during the week.

CFTC data recorded a renewed increase in Sterling shorts, but positive developments will be needed to trigger a reversal.

As expected, Conservative and Labour parties lost substantial support in the EU elections with polarising gains for pro and anti-Brexit parties. Political sentiment remained broadly negative with markets uneasy over the risks of a no-deal Brexit, especially given the potential for a hard-line Conservative Party leader following May’s resignation.

GBP/USD was unable to hold above 1.2700 while GBP/EUR fell to around the 1.1300 area and Sterling was unable to recover ground on Tuesday as UK markets re-opened with political stresses still undermining sentiment.

Economic Calendar

06:45CHF GDP (Y/Y)1.00%1.50%
06:45CHF GDP (Q/Q)0.30%0.30%
07:00CHF Trade Balance(APR)2.980B3.247B
07:00German GfK Consumer Confidence (JUN)10.410.2
07:45Consumer Confidence(MAY)-96
08:00GBP Nationwide House Prices (Y/Y)(MAY)1.20%0.90%
08:00GBP Nationwide House Prices (M/M)(MAY)0.00%0.40%
09:30GBP BBA Mortgage Approvals39.3K40.0K
10:00Euro-Zone Consumer Confidence(MAY)--
14:00US House Price Index (M/M)(MAR)-0.30%
15:00USD CB Consumer Confidence(MAY)126129.2
15:30USD Dallas Fed Manufacturing Business Index(MAY)-2
22:00NZD RBNZ Financial Stability Report--

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.