Sterling hits lowest level against the US dollar since May's snap election announcement

Jasper Jolly
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Sterling Rates To Fluctuate During Brexit Negotiations
Sterling has fallen to pre-election announcement lows (Source: Getty)

Sterling fell to its lowest level since Prime Minister Theresa called a snap General Election in April after dovish comments by Bank of England governor Mark Carney this morning.

The pound fell by as much as one per cent from its high point against the US dollar before Carney’s speech, in which he said “now is not the time” for a rate rise.

The currency fell as low as $1.2611 against the US dollar. The last time sterling traded below $1.26 came on the morning before May’s election announcement on 18 April.

Read more: Sterling leaps as three Bank of England hawks vote for interest rate hike

Markets had greeted the decision to go to the polls with euphoria, pushing sterling above $1.30 as May’s poll lead over the Labour party grew.

However, the faltering election campaign followed by the loss of the Conservative party majority has since sent sterling lower against major currencies.

The pound enjoyed a brief rally at the end of last week after three hawks on the rate-setting monetary policy committee (MPC) voted for the Bank to raise its key interest rate, the closest the economists had come to a rate hike in six years.

Read more: Sterling plummets as Mark Carney says now is not the time to raise rates

The MPC’s minutes said the tolerance of above-target inflation, which reached 2.9 per cent in May, was diminishing.

Meanwhile ratings agency S&P Global added further pressure after one of its bosses did not rule out a movement in the UK’s credit rating before the Brexit process is finished.

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