British Pound Hits New Yearly Lows on Brexit News and Political Uncertainty

The  British pound today dropped to  new yearly lows in  the  American session after European Union officials insisted that they would not reopen Brexit negotiations. The  pound made an  about-turn after rallying higher in  the  early European session on  positive Brexit news from Ireland regarding the  Irish backstop amid positive UK jobs data.
The  GBP/USD currency pair today dropped from from a  session high of  1.2639 to  a  low of  1.2492, which was slightly below yesterday’s record lows.
The  cable’s initial rally was triggered by  comments from Irish Deputy Prime Minister Simon Coveney stating that the  EU might reconsider its position on  the  Irish backstop plan. The  currency pair was further boosted by  the  latest UK labour market report released by  the  Office for  National Statistics. According to  the  report, the  average weekly earnings in  the  three months to  October grew by  3.3% versus the  expected 3.0% print, while the  core earnings also beat expectations by  0.1%. The  ILO unemployment rate remained stable at  4.1%, while the  country created an  additional 79,000 jobs. The  jobless claims were also lower than the  previous figure.
News reports that German Chancellor Angela Merkel reportedly told British Prime Minister Theresa May that the  Brexit deal could not be renegotiated triggered the  pair’s decline. PM May may also face a  vote of  no-confidence due to  the  revolt by  MP’s against her current Brexit deal.
The  currency pair’s future performance will continue to  be affected by  Brexit headlines over the  short-term.
The  GBP/USD currency pair was trading at  1.2516 as  at  17:29 GMT having dropped from a  high of  1.2639. The  GBP/JPY currency pair was trading 141.87 having fallen from a  high of  142.93.

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