The British pound today traded sideways against the US dollar after the release of the Markit/CIPS UK Construction PMI in the early European session. The pound rallied slightly higher in the mid-European session in risk-off environment as markets reacted to President Trump’s announcement that the US would institute steep tariffs on imported steel and aluminum products.
The GBP/USD currency pair traded mostly in a sideways ranged marked by a high of 1.3816 and a low of 1.3755.
The currency’s pair’s sideways range begun yesterday after the closure of the American markets following President Donald Trump’s announcement. The release of the positive Markit/CIPS UK Construction PMI, which came in at 51.4 versus the expected 50.5, could not free the pair from its sideways trading pattern. A speech by Bank of England Governor, Mark Carney later in the session highlighting the importance of regulating cryptocurrencies had minimal impact on the currency pair. The currency pair was spared a major decline given the US dollar’s weakness after the Fed Chair, Jerome Powell‘s dovish testimony before Senate yesterday.
The pound was largely weighed down by the risk-off environment as investors feared that an all-out global trade war between the US and other developed countries would hurt the pound. This is highly likely given that the UK is a current account deficit country.
The currency pair’s future performance is likely to be affected by Theresa May‘s speech scheduled for later today.
The GBP/USD currency pair was trading at 1.3790 as at 13:23 GMT having rallied from a low of 1.3755. The GBP/JPY currency pair was trading at 145.39 having dropped from a high of 146.44.
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