Sterling little bruised as seven Labour MPs exit party
Sterling was little bruised by the departure of seven UK Labour MPs today despite it potentially making coalition-building in the UK even more uncertain.
The UK currency was almost unchanged against the euro, at 87.48p, and fell against the dollar to $1.292. US markets were thinned because of the President’s Day holiday.
Against the dollar, sterling “has held up well with some the positive move down to the fact that Labour is now slightly further away from Downing Street with today’s defection of seven MPs,” said Chris Beauchamp, chief market analyst at IG.
“In the tightly-fought parliament of today, such a margin could make all the difference, and would certainly make cobbling together a rainbow coalition of parties even harder than it was 24 hours ago,” he said.
Meanwhile, hedge fund manager Crispin Odey, an advocate of Brexit, renewed his hotly debated wager against sterling as MPs’ failure to agree on the divorce terms heightened concerns the country may crash out of the EU without a deal.
He soured again on the sterling’s prospects last month, betting that the currency will fall further in the event of a no-deal Brexit, Odey said in an interview.
The 180-degree move came weeks after he had unwound his long-running short position, in anticipation of the UK cancelling or postponing its proposed exit and the pound bouncing back to $1.32 against the dollar.
He made about €251m in a day when the British currency slumped after the 2016 decision to leave the EU, though he lost that money in weeks.
