2018.10.2208:09:00UTC+00Pound Drops On Brexit Concerns

The pound fell against its major counterparts in the European session on Monday, after a media report showed that the U.K. Prime Minister Theresa May is facing calls for a no-confidence motion amid discontent among MPs about her handling of Brexit talks following an unsuccessful EU summit last week.

Support among Tory MPs for PM's leadership has diminished further, with Brexit supporter Andrea Jenkyns calling for a vote of confidence in the PM.

Jenkyns suggested that May must attend Wednesday's meeting of the Tory 1922 committee of backbenchers or else she risks making letters demanding no confidence vote go faster.

May will address the Parliament afternoon, when she will acknowledge that 95 percent of Brexit deal has been settled, but EU's proposal on Irish backstop remain unresolved.

Survey by the Confederation of British Industry showed that a majority of British firms said Brexit had a negative effect on investment decision.

Eight out of ten firms said Brexit hit investment as speed of talks outpaced by reality firms face on ground. The majority of firms said they will implement damaging contingency plans in the absence of greater certainty on Brexit by December.

The currency showed mixed trading against its major counterparts in the Asian session. While it rose against the yen and the greenback, it held steady against the franc and the euro.

The pound fell to more than a 2-week low of 0.8835 against the euro, off its early high of 0.8804. On the downside, 0.90 is possibly seen as the next support level for the pound.

The pound dropped to 1.2988 against the franc and 1.3021 against the dollar, from its previous highs of 1.3035 and 1.3090, respectively. If the pound falls further, it may find support around 1.28 against the franc and 1.29 against the dollar.

Having climbed to a 4-day high of 147.58 against the yen at 2:40 am ET, the pound reversed direction and eased to 146.87. The next possible support for the pound is seen around the 145.00 level.

Data from the Ministry of Economy, Trade and Industry showed that Japan's all industry activity rebounded in August.

The all industry activity index climbed 0.5 percent month-on-month in August, reversing a 0.2 percent drop in July and a 0.9 percent decrease in June. Economists had forecast a monthly growth of 0.4 percent.

Looking ahead, Canada wholesale sales for August are due at 8:30 am ET.