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London - The pound fell below $1.30 after the UK hardened its Brexit rhetoric and polls predicted a narrower-than-expected win for Prime Minister Theresa May in June elections.
Sterling weakened against all its major peers as the latest Opinium Research survey showed the opposition Labour Party cutting May’s Conservative Party lead to 13 points from 15 points a week earlier.
A YouGov survey in the Sunday Times put Jeremy Corbyn’s party nine points behind, the first time it has had a single-digit gap since September.
The British currency also declined after Brexit Secretary David Davis said the UK will quit talks with the European Union if the bill for exiting the bloc exceeds €100bn.
“Opinion polls show a sharp narrowing in the Conservative lead, from a huge 19% to sizeable 9%, while warnings that the UK could walk away from an exit deal if the final exit bill is too big don’t encourage optimism about negotiations that start in earnest after the UK election on June 8,” said Kit Juckes, London-based strategist at Societe Generale in a client note.
He added that “shorts in GBP/CAD and GBP/NOK are a better bet for now.”
The pound fell 0.5% to $1.2974 as of 09:39. The pair broke above the crucial $1.30 mark last week, reaching the highest since September, and closed above that level on Friday. Sterling weakened 0.2% versus the euro.
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