The British pound fell against the dollar and the euro on Monday as investors worried that Theresa May would lose her British prime minister. May’s country’s EU exit project is facing a challenge. On Tuesday, lawmakers will try to win concessions on government law to cut off relations. The Sunday Times reported that 40 MPs from the ruling Conservative Party have agreed to sign a declaration calling for a no-confidence vote on May. The figure is eight times smaller than that needed to elect a new prime minister.
The British currency fell 0.55% against the dollar to 1.3115, the lowest level since November 6 this year. The price is closer to the 100-day moving average line, which is a key technical level. Lukman Otunuga, an analyst at FXTM, London, said that despite the rise in interest rates in November, the mood for the pound remains down. On Monday, the dollar index, which traces the greenback against a basket of six major currencies, rose by 0.11 percent to 94.50 points, recovering from a 0.6 percent drop in the past week. Concerns that the proposed US corporate tax cut could be postponed to 2019 have put pressure on green money.
The dollar remained strong enough on Monday, pending major domestic economic data including inflation and retail sales to be announced later this week. The euro, for its part, registered very slight changes, as investors await the ECB’s conference on Tuesday. Central bank presidents are expected to voice their views on the world economy. ECB President Mario Draghi, Fed President Janet Yellen, Central Bank Governor Haruhiko Kuroda and England’s Central Bank chief Mark Carney will be part of the conference organized by the ECB in Frankfurt. The Canadian dollar, after several profitable sessions over its US counterpart, recorded a correction on Monday.
Oil prices remained tight on Monday, influenced by the Middle East turmoil and rising production in the United States. Light crude US oil ended session on Monday with a 2 cents up to $56.76 a barrel. Brent crude oil price index fell 29 cents to 63.23 dollars a barrel after it reached a 14 percent increase this month. Investors have turned their attention to Saudi Arabia. Concerns about the political stability of the largest oil producer in the Middle East, caused by the purges of the Crown Prince Mohammed bin Salman, are expressed.
Gold recovered from the previous heavy adjustments and rose on Monday. Spot Gold rose 0.2 percent to $1,279 per troy ounce. Gold futures for delivery in December were down 0.4 percent to $1 278.90 per ounce. Among other precious metals, silver rose 0.9 percent to 17.05 dollars per troy ounce. Platinum increased its value by 0.8% to 933.40 dollars per ounce while the palladium adjusted its price by 0.4% to 990.40 dollars per ounce.