Monday morning in Asia, the pound tumbled to a 10-day low against the dollar as the British Prime Minister Gordon Brown faced a renewed challenge to his leadership after support for the Labour party plunged to its lowest level in a century in European elections.
Compounding Labor's woes, the far-right British National Party won two seats in the European Parliament for the first time. The BNP gained the seats in two regions of northern England at the expense of Brown's Labor Party, which has been hurt by a scandal over politicians' expenses.
Brown, who reshuffled his government after six ministers resigned last week, was set to meet today evening with Labor members of parliament, a number of whom have called on him to quit ahead of a genera; election due within a year.
The political turmoil rattled markets last week, pushing the pound lower. Investors are wary of uncertainty when Britain faces its deepest recession since World War Two and the budget deficit has reached a record 175 billion pounds.
The pound declined to a 10-day low of 1.5931 against the dollar during early Asian deals on Monday. The next downside target level for the pound is seen at 1.578. At last week's close, the pound-dollar pair was quoted at 1.5993.
In early Asian trading on Monday, the pound fell to 0.8783 against the euro. This may be compared to Friday's close of 0.8738. If the pound weakens further, it may test support around the 0.887 level.
The pound, which closed last week's trading at 1.7365 against the Swiss franc slipped to 1.7295 in early Asian deals on Monday. The near term support level for the pound-franc pair is seen at 1.713.
During early Asian deals on Monday, the pound dropped to 156.78 against the Japanese yen. On the downside, 155 level is seen as the next likely target for the pound. The pound-yen pair was worth 157.92 at Friday's close.
The current account in Japan came in at an unadjusted surplus of 630 billion yen in April, the Ministry of Finance said in a preliminary report today - down 54.5 percent on year and falling for the 14th consecutive month.
That was sharply lower than the 850 billion yen surplus that analysts had been expecting, easing from 1.485 trillion yen in March.
The adjusted current account surplus was 966.3 billion yen, topping estimates for a surplus of 960 billion yen.
Also, the Bank of Japan said that bank lending in Japan was up a seasonally adjusted 3.9 percent on year in May, following the 4.2 percent annual increase in April.
The Swiss unemployment rate for May, Euro-zone sentix investor confidence for June and the German factory orders for April are expected in the upcoming European session.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.