Longest Pound Slide Since 2000 Shows Brexit Respite All But Over

(Bloomberg) --

The pound headed for the longest losing streak against the euro since the turn of the century as rising U.K. political risks fanned concern about the nation’s ability to achieve an orderly Brexit.

Sterling fell for the ninth day against Europe’s single currency, as Prime Minister Theresa May bowed to pressure and agreed that next month she will set out a timetable for her exit. The pound also dropped for a fifth day to a three-month low versus the dollar, as global investor sentiment weakened amid the escalating U.S.-China trade conflict.

The pound has led the past week’s losses among major currencies, with investors braced for more turmoil as a May exit risks ushering in a hardline Brexiteer who could take Britain out of the European Union without a deal. Investor sentiment was weighed further as former Foreign Secretary Boris Johnson confirmed he would run.

“The timeline of Theresa May’s departure is much closer now,” said Jordan Rochester, a currency strategist at Nomura International Plc. “There may be positives from the new leader, whoever that may be, but they will face the same stalemate in Parliament and could have to call an election before getting on with anything else.”

Sterling fell 0.1% versus the euro to 87.34 pence per euro, heading for the longest run of declines since December 2000. Against the dollar, it slipped by 0.3% to $1.2801, after touching the lowest level since Feb. 15.

The pound outperformed its Group-of-10 peers in the first four months of the year as Britain secured an extension to the Brexit deadline, but has pared the gains since as the U.K. government has made little progress toward resolving the deadlock. May announced this week that she will put her Brexit deal back to a vote in Parliament in the week of June 3, but it’s not expected to be approved given the opposition Labour party is not backing it.

--With assistance from Anooja Debnath.

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, Anil Varma, Neil Chatterjee

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