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Pound Hits Four-Month Low as May’s Rivals Jockey for Position

Sterling headed for its twelfth straight day of losses versus the euro, the worst run in the shared currency’s history.

Pound Hits Four-Month Low as May’s Rivals Jockey for Position
A collection of British five pound sterling banknotes sit in this arranged photograph in London, U.K. (Photographer: Miles Willis/Bloomberg)

(Bloomberg) --

The pound slid to touch a four-month low against the dollar as Prime Minister Theresa May’s Brexit bill looked set to fail again and candidates lined up to replace her.

Sterling headed for its twelfth straight day of losses versus the euro, the worst run in the shared currency’s history, as the market continued to price in the risk of a no-deal Brexit. May will meet her cabinet Tuesday as she struggles to secure backing for a vote in Parliament on the Brexit deal in early June, after agreeing to set a timetable for her departure.

Pound Hits Four-Month Low as May’s Rivals Jockey for Position

The currency has dropped 2.6% this month, the worst performance among peers, as the possibility of May’s departure raises the risk of a more hardline replacement. The EU elections this week are also in focus as a win for the no-deal supporting Brexit Party could solidify support for a hard Brexit candidate.

“Politics, economics, policy and position should all weigh on the pound into the EU elections this week,” said Neil Jones, head of hedge fund currency sales at Mizuho International Plc. “I am looking for a further trend lower and break through on the downside.”

The pound has broken out of its recent trading range, slipping as much as 0.3% to $1.2685, the lowest since Jan. 15. Strategists see the currency falling as low as $1.20 if current favorite Boris Johnson replaces May as leader. Against the euro, it fell 0.1% to 87.80 pence, weakening more than 3% over the past 12 sessions.

To contact the reporter on this story: Charlotte Ryan in London at cryan147@bloomberg.net

To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net, Neil Chatterjee, Scott Hamilton

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