The British pound sold off sharply yesterday and continues to sell off this morning. The pound has been weak following rumors that Theresa May was planning on resigning. While Sky News yesterday said that May's office had denied the rumors, this morning former Conservative Party Chairman Shapps claimed that talk of 30 Conservative MPs wanting May out was "about right". The BBC covered the news story earlier this morning. Given May's weak grasp on power, expectations for a 'Brexit deal' continue to fall, raising the risk of 'hard Brexit'.
GBP/USD is currently below 1.3080. EUR/GBP continues to rise, despite the euro-related risks we covered earlier this week. EUR/GBP is currently trading above 0.8930. The pound has been mostly flat against the Australian dollar and the Canadian dollar this morning, with GBP/AUD around 1.6830 and GBP/CAD around 1.6460.
This week's economic releases includes a range of survey data. On Monday, Markit manufacturing PMIs were lower than expectations (55.9 vs. 56.4 expected). Tuesday's Markit/CIPS construction PMIs came in far below expectations (48.1 vs. 51 expected). On Thursday, Markit/CIPS services PMI data beat expectations (53.6 vs 53.2 expected).