On Friday morning, the Sterling dropped against the dollar after Donald Trump, the President of the United States of America, said that the Brexit plan of Theresa May would “kill” chances of a trade deal between the United States and the United Kingdom.
The pound dropped by 0.61 percent to hit $1.3126 its worst price since the start of the month, during early trading, and also fell against the euro, dropping to 1.1286.
In an interview with the Sun, Trump said that he had advised PM May against a soft Brexit strategy, however, he said that she “didn’t listen” to him.
While commenting on the Brexit plan that reached at Chequers during the previous week, the US President stated: “If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.”
The head of research at London Capital Group, Jasper Lawler, said that the remarks made by President Trump “was a blow to both host Theresa May and the pound.”
He stated: “Let’s not forget that the hope of a quick trade deal with the US was a significant factor in Theresa May’s decision to invite Trump in the first place. Another embarrassment that May could have done without.”
He added: “Trump’s words of no deal have confirmed the fears of Brexiteers and will have stoked the fire in the hard Brexit camp, making Theresa May’s future in charge look doubtful once more. This fear was reflected in the pound as it dropped sharply in late night trading.”
President Trump and PM May held a joint press conference on Friday afternoon. Lawler stated: “In the absence of any encouraging trade comments, gains in the pound going forward could be limited.”
The drop in the pound helped in pushing the FTSE 100 up by 0.7 percent in early trading.