British Pound Declines Against US Dollar as Brexit Worries Persist

The British pound was today on a downtrend against the US dollar even as Brexit worries remained the main driver behind the currency’s movement. The pound weakened against the US dollar on the back of comments made by Donald Tusk who said that the UK government could reverse Brexit if they so wanted.

The GBP/USD currency pair today declined by over 100 points from its daily high hit during the Asian session.

The comments made by the European Council President mid-European session sunk the British pound to new lows against the greenback. Donald Tusk hinted that the United Kingdom could leave the EU without a deal by saying that the UK government was fully responsible for how the UK left the EU. These comments follow last weeks comments by the British PM, Theresa May, who revealed that Brexit negotiations had hit a deadlock.

The rebound in US treasury yields, which rose to a high of 2.40%, boosted the greenback, hence, contributing to the currency pair’s decline. Given the empty UK dockets today, the release of positive IHS Markit US Manufacturing PMI data in the American session, which was recorded at 54.5 as compared to the expected 53.4, served to drive the pair lower. The IHS Markit US Services PMI also exceeded expectations by coming in at 55.9 versus the expected 55.1.

The currency pair’s future performance is likely to be affected by the release of the UK’s GDP data and the US durable goods orders, both scheduled for tomorrow.

The GBP/USD currency pair was trading at 1.3119 as at 18:18 GMT having declined from a high of 1.3227 earlier today. The GBP/JPY currency pair was trading at 149.40 having dropped from a daily high of 150.08.

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