British Pound and Brexit Chaos: May’s Leadership Challenged
The British pound rebounded sharply on Wednesday, as conservative lawmakers prepared to hand Prime Minister Theresa May a vote of no confidence for her handling of Brexit. The embattled leader could be ousted from her position in a matter of weeks should the vote go as planned, complicating an already messy Brexit proceeding.
Pound Plays the Rebound
Pound sterling rose 1.2% against the dollar on Wednesday to reach $1.2637. GBP/USD is rebounding from a sharp selloff last week that was stoked by uncertainty over the United Kingdom’s exit from the European Union.
The sharp rally overcame several technical obstacles between 1.2550-1.2600. The path of least resistance is higher, putting cable on a path to re-test the upper end of the 1.2600 region.
The U.S. dollar exhibited weakness across the board midweek, registering losses against the euro and Canadian dollar. This comes despite the release of November inflation data showing a steady rise in consumer prices. The U.S. core consumer price index (CPI) rose 0.2% on month and 2.2% annually, the Department of Labor said. Both readings were in line with forecasts.
May’s Leadership Challenged
Theresa May’s tumultuous term as prime minister may be coming to an end as her party prepares a ballot on whether to oust her from the leadership role. As The Wall Street Journal reports, Tory lawmakers will vote on May’s future this evening. A vote of no confidence would require the ruling party to find a new leader, a process that could take several weeks to begin. May could retain her post in the interim and resign once her successor is chosen.
The vote was instigated after 48 Conservative lawmakers sent letters of no confidence in the prime minister to a special party committee, exceeding the minimum threshold of 15% of existing Tory representation in Parliament.
“A change of leadership in the Conservative party now will put our country’s future at risk and create uncertainty when we can least afford it,” May said Wednesday, according to WSJ. “Weeks spent tearing ourselves apart would only create more division just as we should be standing together serving our country.”
May replaced David Cameron shortly after the Brexit vote in 2016. Her term in office has been wrought with failures and uncertainty, beginning with a botched early-election call that weakened her party’s standing in the House of Commons.
While the U.K. has secured a draft Brexit deal with the European Union, it satisfies neither the Europhiles nor the Brexiteers, putting May in a contentious position in the House and within her own cabinet. The existing text would put the U.K. on the exit path by March 2019.
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