British Pound Drops on UK Construction PMI, Later Rallies on Carney

The  British pound today dropped to  new lows extending yesterday’s decline following the  release of  disappointing UK construction data earlier today. The  GBP/USD currency pair later rallied higher following the  testimony by  the  Bank of  England Governor before the  UK parliament where he promised to  help smooth the  Brexit process.
The  GBP/USD currency pair today dropped from an  opening high of  1.2868 to  a  low of  1.2813 in  the  early European session before rallying higher.
The  currency pair opened today’s session being weighed by  Brexit jitters and  yesterday’s disappointing Markit/CIPS UK Manufacturing PMI, which fell to  25-month lows. The  release of  the  Markit/CIPS UK Construction PMI earlier today drove the  pair lower as  the  print came in  at  52.9 missing consensus estimates set at  54.9. Shortly thereafter, the  BoE Governor Mark Carney was set to  testify before Parliament during an  inflation report hearing. Carney’s statement that he would do ‘whatever I  can’ to  ensure a  smooth Brexit was what lifted the  pair from its daily lows.
The  resurgent demand for  the  US dollar as  tracked by  the  US Dollar Index also contributed to  the  selling pressure on  the  pair. The  pair headed lower following the  release of  the  US ISM Manufacturing PMI, which came in  above expectations.
The  currency pair’s future performance is likely to  be affected by  tomorrow’s UK services PMI and  the  US trade balance report.
The  GBP/USD currency pair was trading at  1.2820 as  at  14:14 GMT having retraced most of  its gains following the  US ISM report. The  GBP/JPY currency pair was trading at  142.81 having fallen from a  high of  143.25.

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