The pound sterling stumbled again Wednesday as the United Kingdom's new prime minister was expected to announce a minister to oversee the nation's exit from the European Union. After weeks of gloom, the pound saw two days of strong gains before dropping 0.3 percent against the dollar to $1.3212.
Theresa May, the U.K.'s second female prime minister who rose to power amid political chaos following a vote to leave the EU last month, was expected to announce Wednesday night her first senior appointments to her government. She promised to create a union “between all of our citizens” during her first remarks to the public as she stood outside No 10 Downing Street in London after she was formally anointed prime minister at Buckingham Palace by Queen Elizabeth, the Guardian reported.
"When it comes to opportunity we won’t entrench the advantages of the fortunate few. We will do everything we can to help anybody, whatever your background, to go as far as your talents will take you," she said.
Meanwhile, the Bank of England started a two-day monetary policy meeting Wednesday and was expected to announce this week whether interest rates would hit fresh record lows. If rates hold steady, the pound could bounce back Thursday.
"Attention is turning toward tomorrow's BoE headlines," Mizuho's head of hedge fund FX sales, Neil Jones, told Reuters. "I sense some participants are selling sterling in expectation for a return to the downside."
Bloomberg declared the pound last week, "2016’s worst performer among major currencies." May could further shake up the markets with the announcement of a new finance minister and by triggering Article 50, which would set in motion the process for exiting the European Union.
The world's largest asset manager, BlackRock, predicted Tuesday that Britain would enter a recession later this year because of the Brexit vote. The fall out has also hit other countries. The Bank of Canada said Wednesday it had cut its growth forecast because of the referendum to 1.3 percent this year, down from 1.7 percent earlier this year. May opposed the so-called Brexit referendum, but has said she will carry out the people's will.
In the United States, the stock market hit record highs Wednesday when trading opened in New York.