The British pound tumbled on Monday session and bolted out from its one-year high against the US dollar as investors shifted back their focus on Brexit ahead of Prime Minister Theresa May’s speech this Friday.
Sterling ended in the negative territory at the start of the week after dropping 0.4% to close at 1.3487 per US dollar, moving back below the elusive 1.35-level.
Last Friday, the pound settled at 1.3592 per greenback, its highest finish in more than year, as the market cheered the impressive monetary policy outlook of the United Kingdom. A key official form the Bank of England also fueled the pound to record high as he commented that interest rates should be increased in the coming months.
The market is 80% confident that the central bank will increase its key interest rates in November as investors are seeing positive signs of economic growth in the past months.
However, on Monday, investors once again shifted their focus to Brexit negotiations as the Prime Minister is set to deliver her key speech this Friday, in an attempt to defend UK government on its stand in the said issue.
The British pound has lost most of its gain since the Brexit vote, slipping from 1.36 to as low as 1.29, and it took more than a year to slightly recover.
Last Friday’s close was the nearest level the British pound has touched since the pre-Brexit vote value 0f 1.3682.