The pairing has fallen after the weekend’s European elections indicated a huge drop in support for the two major UK parties, with Labour and the Conservatives losing favour amongst pro-EU voters and hard-Brexiters alike – with the newly-formed Brexit Party overwhelmingly outperforming both parties. Labour leader Jeremy Corbyn has since called for a second referendum. He said: “It is clear that the deadlock in Parliament can now only be broken by the issue going back to the people through a general election or a public vote. “We are ready to support a public vote on any deal.”
The Shadow Chancellor, John McDonnell, meanwhile, remained cautious.
He added: “After [the European election results] … there aren’t many Tory MPs who’re going to vote for a general election.”
Sterling has remained somewhat subdued against many of its currency rivals, with Brexit casting a shadow once again as uncertainty rises over the Conservative leadership, with Theresa May due to leave office on 7 June.
US dollar traders, meanwhile, will be awaiting the publication of the US consumer confidence figures today, and with any signs of an uptick this could strengthen the greenback.
Today will also see the release of the Case-Shiller Home Prices Indices for March, which are expected to ease.
The US-China trade war still remains in focus for many greenback traders, however, with fears mounting that trade tensions will drag on.
Freidrich Wu, a Professor at Nanyang Technology University in Singapore said: “More and more Chinese now believe the US wants to sabotage China’s economic development, not so-called fair trade with China.
“Huawei issue has greatly strengthened such an understanding among Chinese.
“Are we misreading US intentions? The US side should explain it seriously.”
The pound US dollar exchange rate will remain sensitive to UK political developments this week, although any indications of there being a general election or second-referendum could potentially work in favour of Sterling if investors think this would reduce the likelihood of a no-deal scenario.