Pound Crashes as Johnson’s Government Pushes for Hard Brexit

The  Sterling pound today crashed against the  US dollar amid fears that Boris Johnson‘s government was pushing for  a  hard Brexit despite his parliamentary majority. The  GBP/USD currency pair today fell to  its pre-election lows as  investors sold the  pair following the  release of  a  mixed UK jobs report ahead of  Friday’s Brexit bill tabling.
The  GBP/USD currency pair today fell from a  high of  1.3299 in  the  Asian session to  a  low of  1.3099 and  was trading near these lows at  the  time of  writing.
The  currency pair attempted to  rally at  the  start of  today’s session but made little headway as  sellers stepped in  and  pushed it lower. The  pair’s drastic fall was triggered by  news that the  UK government was considering a  hard Brexit. Johnson’s government chose to  eliminate the  proposal to  extend trade talks with the  European Union past the  official deadline of  December 2020. The  UK is set to  leave the  EU on  January 31st but Michel Barnier, the  EU’s chief Brexit negotiator, insists that comprehensive talks could extend into 2021. The  opposition Labour Party has criticised the  ruling Conservative Party of  recklessness terming the  move as  unnecessary.
The  release of  the  mixed UK labour market report for  December by  the  Office for  National Statistics also contributed to  the  pair’s decline. The  release of  the  upbeat US building permits and  housing starts data by  the  Census Bureau in  the  American session also drove the  pair lower.
The  currency pair’s future performance is likely to  be affected by  tomorrow’s UK inflation data and  Brexit headlines.
The GBP/USD currency pair was trading at 1.3130 as at 17:5 GMT, having fallen from a high of 1.3299. The GBP/JPY currency pair was trading at 143.74, having dropped from a high of 145.72.

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