Date Published: 05/10/10

Pound slips vs Euro, Pares gains against Dollar on Gordon Brown

The pound slipped against the euro after U.K. Prime Minister Gordon Brown said Liberal Democrats leader Nick Clegg will hold formal talks about a coalition government with the Labour Party.
Sterling pared its gain versus the dollar as Brown also said he’s willing to resign as Labour Party leader to allow negotiations on forming a government with Clegg’s party to progress. The pound rose earlier amid speculation David Cameron’s Conservative Party and the Liberal Democrats were moving closer to an alliance that would be strong enough to tackle the nation’s record budget deficit.
“This just shows that we have ongoing political indecision,” said Jeremy Stretch, a senior currency strategist at Rabobank International in London. “Uncertainty is continuing to be the driving force and we know investors don’t like that.”
Sterling weakened 0.3 percent to 86.35 pence per euro as of 5:28 p.m. in London, after strengthening to 85.46 pence. The U.K. currency advanced 0.4 percent to $1.4869, after appreciating to $1.5054.