The GBP/USD lost significant ground in the early hours of the North American session as the US dollar gained strength and traded higher than in the previous session. The British pound weakened significantly against the US dollar after an announcement from Theresa May’s office indicated that her government was committed to its Brexit agenda.
The currency pair lost over 50 points at the height of its decline, but has so far recovered and is trading much closer to its opening price at the time of writing.
The British pound weakened after Theresa May‘ released a statement warning MP’s that the UK government would not respect a parliamentary decision on the Brexit bill that favors the UK remaining in the European Union. The recovery of the US dollar after Friday’s mixed report regarding employment in the US also served to increase the selling pressure around the sterling pound.
The pound was also affected by the weak economic data reported in the UK last week, which indicates that the UK economy might be slowing down in terms of economic growth.
The currency pair will be significantly affected by the vote on article 50 in the House of Commons scheduled for Wednesday, which is expected to provide a boost to the pound, and to provide clear direction regarding Brexit.
The GBP/USD currency pair was trading at 1.2459 as at 18:22 GMT having dropped from a daily high of 1.2498. The GBP/JPY was trading at 139.66 having tested a daily high of 140.74.
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