-Sterling hits 3-month low as Brexit deadlock saps support for PM May
(In para 5 corrects sterling lows to $1.2827 and 87.35 pence
versus the euro)
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv
By Tom Finn and Sujata Rao
LONDON, May 15 (Reuters) - The pound fell sharply on
Wednesday on growing expectations that Prime Minister Theresa
May will again fail to get her Brexit deal approved and could
soon face a leadership challenge.
Sterling has weakened more than 1% this month as deadlocked
cross-party talks expose deep political divisions over how, when
and even if Brexit should take place.
May plans to put forward her thrice-rejected Brexit deal in
the week beginning June 3, to try to secure an agreement before
lawmakers go on summer holiday.
But Britain's opposition Labour Party said it would not
ratify the deal if a compromise agreement is not reached with
Those comments fuelled speculation that May will soon be
ousted and pressured the pound.
The currency fell more than 0.5% to $1.2827, its lowest
since Feb 15, and dropped around 0.4% versus the euro to 87.35
"Failure to pass the deal [in June] could well see May
finally step down, opening the door for a more eurosceptic prime
minister and a possible hard Brexit," said Petr Krpata, an FX
strategist at ING in London.
Sterling has fallen for eight consecutive days against the
dollar despite mostly solid economic data in Britain in recent
A worry for investors is that months of inventory
stockpiling by British companies before Brexit will show up this
British employment data on Tuesday showed wage growth in the
quarter ending March was lower than expected, signalling the
possible start of a turbulent period for the broader economy.
Volatility in currency markets is historically low and in
recent weeks investors have curtailed their bets on big swings
in the pound.
(Reporting by Tom Finn; Editing by Larry King, Toby Chopra and
First Published: 2019-05-15 15:46:47
Updated 2019-05-15 18:56:54
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