June 13, 2019 / 9:12 AM / 6 days ago

Pound trading volumes shrink as Brexit delay sends investors to sidelines

LONDON, June 13 (Reuters) - Trading of the British pound has fallen sharply since Britain delayed its exit from the European Union, with turnover in May down almost a tenth versus a year earlier and activity in the futures market at its lowest since 2016.

Data compiled by CLS, a major settler of trades in the $5.1 trillion-a-day foreign exchange market, showed average daily turnover of sterling products dropped to $249.5 billion in May, its lowest monthly total in 2019. It was also lower than the $274.5 billion traded on average in May of last year.

In the futures market, there has also been a drop in activity as the delay to Brexit and the start of the race to choose a new prime minister encouraged investors to sit on the sidelines, rather than trade through the political uncertainty.

According to separate data from CME, one of the world’s biggest exchanges, average daily volumes of sterling/dollar futures contracts fell nearly 18% in May versus a year ago. April’s average daily total was the lowest since August 2016, shortly after Britain voted to leave the EU. (Reporting by Tommy Reggiori Wilkes; editing by Sujata Rao)

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