Sterling pulled away from major currencies on Friday, breaking a week-long losing streak and five-month US dollar low in the process, after Mrs May confirmed she would stand down as leader of the Conservative Party on 7 June, 2019. This morning this pound is keeping close to higher levels seen at the end of last week and was trading positively against the euro and US dollar. Sterling was trading at €1.1736 versus the single currency earlier today and was at €1.1362 at 9.28am BST. At the same time of writing, the pound was at $1.2717, having previously reached $1.2746.
The main political movement of the day sees the results of the European elections trickle in across the continent.
The Brexit Party are so far surging ahead of the competition in a devastating blow for both the Conservatives and Labour.
So far of the 64 MEPs that have been declared, Nigel Farage’s Brexit Party has secured 28 seats.
The Liberal Democrats are on 15, while Labour has 10, Greens seven, the Tories three and Plaid Cymru one.
In both France and Italy, nationalist anti-EU parties topped the polls, with Marine Le Pen’s National Rally and Matteo Salvini’s Lega both getting the most votes.
But lender Scotiabank is warning how the pound could be set for a fall again, with the firing gun for the Conservative Party leadership race due to be sounded on 10 June, 2019.
They said in a note to clients :“We expect gains to be short-lived as the main leadership candidates all lean towards a ‘harder’ Brexit.
“The parliamentary math that prevented May from making headway remains intact, however, and it might well be as difficult for the new Prime Minister to advance a negotiated Brexit in any form.”
Shin Kadota, senior FX and rates strategist at Barclays, added: “The focus is on how each government will react and how the Brexit negotiations will play out after this elections.”
Speaking this morning, Mr Farage said he would “change the shape of British politics” after his Brexit Party’s triumphant performance in the European elections.
Mr Farage said he was getting ready to fight a general election, warning that his Brexit Party could “stun everybody” if Britain had not left the EU by the next national contest.
He said: “We’re not just here to leave the European Union but to try and fundamentally change the shape of British politics, bring it into the 21st century and get a Parliament that better reflects the country.”
The results across Europe suggest a decline in the main centre-right and centre-left groupings in the European Parliament, with a boost for the Liberals, Greens and nationalists.