RationalFX : Sterling remained strong yesterday, still boosted by last week’s general election victory for the pro-Brexit Conservative Party, even in the face of data showing that British businesses this month suffered their worst downturn since mid-2016…
Prime Minister Boris Johnson’s win saw the pound rally because the market perceives his party as the most able to end the Brexit uncertainty, which has harmed the UK economy.
UK Purchasing Managers’ Index (PMI) data for the services and manufacturing sectors in December has however underlined the weak state of the economy, dragged down by the fastest drop in manufacturing output since July 2012. Survey respondents overwhelmingly blamed uncertainty over domestic politics and Brexit, as well as subdued global economic conditions, for the slump in business activity.
Over the weekend Conservative politicians repeated their pledge to bring the UK out of the European Union by 31st January and reach a new trade deal with the bloc by the end of 2020. Johnson intends to re-submit the Withdrawal Agreement Bill to Parliament on Friday for ratification before Christmas.
Source : ETFWorld.co.uk