Sterling Pound Falls Despite Upbeat UK Manufacturing PMI

The  British pound today fell to  new 2-day lows against the  US dollar amid a  risk-off market sentiment, which favored the  US dollar. The  GBP/USD currency pair today broke the  crucial 1.2700 support level as  the  markets continued to react to the  uncertainty facing the  UK economy due to  the looming Brexit date.
The  GBP/USD currency pair today rose to  a  high of  1.2774 before dropping to  a  low of  1.2656 in  the  mid-European session.
The  Sterling pound rallied higher in  the  Asian session amid the  risk-on market sentiment, but headed lower in  the  early European session. The  GBP/USD currency pair was weighed down by  Brexit fears even as  UK businesses start preparing for  a  no deal Brexit scenario. Given the  fast-approaching March 29 deadline and  with no tangible deal on  the  table, a  hard Brexit is highly likely. The  current Brexit deal negotiated by  British Prime Minister Theresa May is due to  be voted on  by  Parliament later this month, but there is no guarantee that it will pass.
The  release of  the  latest Markit/CIPS UK manufacturing PMI by  IHS Markit in  the  early London session gave the  cable a  temporary reprieve. The  manufacturing PMI print for  December came in  at  54.2 versus the  expected 52.5 as  UK businesses stockpiled resources in  anticipation of  a hard Brexit.
The  currency pair’s future performance is likely to  be influenced by  tomorrow’s Markit UK construction PMI and  the  ISM US Manufacturing PMI.
The  GBP/USD currency pair was trading at  1.2660 as  at  12:17 GMT having dropped from a  high of  1.2774. The  GBP/JPY currency pair was trading at  138.28 having fallen from a  high of  139.88.

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