The British pound briefly fell towards a three-week low on Wednesday as Prime Minister Theresa May defended her plans for Brexit, although the currency's moves were limited as analysts said they saw little in her speech that was new. May said she was confident Britain could agree a deal for its exit from the European Union, although she said she would rather leave without a deal than accept the carve up of the United Kingdom.
Sterling was weaker before May delivered her annual speech to the Conservative Party conference, but it did briefly slip further after she pledged to stick with her Brexit plans as Britain and the EU enter another round of negotiations to decide their split. "In between dancing onto stage and criticising the Labour Party, there was little fresh rhetoric today from Theresa May on her stance on Brexit. The market reaction was muted, and despite a small wobble, the pound's response was not as pronounced as we have seen in the last few weeks," said Hamish Muress, currency analyst at OFX.
The pound dropped 0.4 percent on the day to as low as $1.2963, close to Tuesday's three-week low of $1.2941, before recovering to trade down 0.1 percent at $1.2994. Sterling was unmoved versus the euro at 88.995 pence during May's speech but later rallied 0.4 percent to 88.67 pence, pushed higher by a broad weakening in the single currency.
The currency has been hit hard by concerns over a growing conflict within her party over May's Brexit plan with the pound falling to its lowest since Sept. 10 in the previous session. Analysts said there was little to excite currency traders in May's speech, with attention shifting to the next phase of talks with Brussels.
"Nothing new of substance on Brexit... $GBP markets now looking to upcoming Brexit talks. Most interesting thing may be 'end to austerity' preview of a slightly more expansionary UK budget," Viraj Patel, an analyst at ING, said on Twitter, referring to May's announcement of an end to a decade of cuts to British public service spending. Earlier on Wednesday, a business survey showed Britain's services sector kept up its steady growth in September but uncertainty about the economy remained high six months ahead of Brexit. The currency was little moved.