Sterling stayed subdued yesterday, below seven month-highs against the Dollar as investors awaited further developments in Britain’s suspended election following Monday night’s explosion in Manchester that killed 22 people at a concert.
The Pound traded lower for most of the day, last down 0.1% at $1.2993, below its highest level since September 29, 2016. Analysts said that: “At present, with the campaign suspended in the light of what happened last night with Manchester, there’s not too much of the political aspect weighing on Sterling at the moment.”
Since Prime Minister Theresa May surprised financial markets with her April announcement of a general election in June, the Sterling has gained nearly 4% urging speculators to trim record high bets against the Pound. Speculators cut “short” bets against the Pound to 32,995 contracts in the week to last Tuesday, bringing them to the lowest since March 2016.
Sterling climbed above two-month lows trading at 86.31 pence per Euro, up 0.2% on the day. There were further signs that consumer spending was going to be floppy in the face of inflation that driven by the Pound’s 20% fall since the Brexit vote. Data showed Britain’s budget deficit widened by more than expected at the start of the new financial year as value-added tax revenues flattened.