The pound is gaining against all its major crosses this morning as another speech from UK PM Theresa May has been warmly greeted by the currency markets. The gain in sterling is causing losses on the stock market however, with the FTSE 100 lower by more than 40 points at the time of writing.
May talks up the pound
The speech delivered by Theresa May in London on Tuesday saw the pound post its largest rally in several years and whilst today’s gains are meagre in comparison, the currency is once more reacting positively to Brexit comments from the PM. Speaking at the world economic forum in Davos Mrs. May used similar rhetoric to earlier this week by stressing that despite the intention of her government to take the UK out of the single market they remain focused on global trade. Fears that the economic consequences of Brexit would be relegated to the back burner whilst immigration controls were prioritised in negotiations now seem overdone and it is clear that the UK are hoping for as little disruption to trade as possible. Whilst critics will point out that Mrs. May’s aims are optimistic at best and unrealistic at worst, many will take heart in the news that she is at least attempting to avoid a cliff-edge scenario.
Royal Mail (LON:RMG) slumps despite posting solid Christmas figures
Shares in Royal Mail have slumped by more than 5% this morning after the postal service company blamed business uncertainty for a collapse in UK letter revenues. The stock is sitting at the foot of the FTSE 100 today and CEO Moya Greene has said that while parcel volumes continued to rise over the crucial festive season, the company experienced a continued drop-off in what many people would call junk mail and wider business activity. After hitting its highest level in more than 8 weeks earlier this week, Gold prices experienced their largest decline of the year as US Fed Chair Yellen struck a hawkish chord whilst speaking in San Francisco. This drop has been felt in Gold related stocks with Fresnillo (LON:FRES) and Randgold Resources (LON:RRS) both off by more than a percent. Despite the declines for the broader index there are still a number of stocks rising with Rolls Royce (LON:RR) continuing its bright start to the year and moving back above the 700p mark.