FxWirePro: Pound might suffer as Prime Minister May faces revolt

The recent strength of the Pound, which has been fueled by a weaker dollar, an initial agreement between the United Kingdom and the European Union over Brexit bill and two year transition period, and a hawkish Bank of England (BoE) might fade quickly over the domestic political uncertainty brewing in the UK.

According to reports, Prime Minister May’s Brexit strategy is facing a backlash from all sides and the pressure is growing for her to leave the Downing Street once a trade deal is negotiated with the EU in the coming autumn. According to a report in the Times, discontent over May policy reportedly boiled over at a fund-raising event, where more than quarter of the 50 donors presented demanded her resignation, and these were very traditional donors. She is facing attacks from all sides of the Tory factional war, with Brexiteers insisting she is not being tough on the EU, and Remainers warning the government is letting down the country.

Two attempts have already been made to oust her. Grant Shapps, the former Conservative chairman, had emerged as a leader of the plot to oust Theresa May in September, who has claimed at the time that the party members are well within their rights to call for the Prime Minister to quit. According to him up to 30 Conservative Party members were ready to support the move to oust her. However, Mr. Shapps attempt to gather signatures to trigger a Conservative leadership election failed miserably at that time. There was again a report in November that 40 members of the parliament were ready to sign a letter of no-confidence to move her from the office.

So far, the Pound hasn’t taken much note of it, however, if the trouble continues to rage, the pound is very much likely to reverse its recent course and turn south.