The British pound today headed lower in the early European session following comments by Donald Trump ahead of his meeting with the British Prime Minister. However, the pound staged a recovery from the early American session as the US dollar experienced a modest retracement upon which the pound capitalized.
The GBP/USD currency pair today declined declined to a daily low of 1.3125, but later rallied to a new high of 1.3221, and was on an uptrend at the time of writing.
The currency pair’s initial decline could be attributed to President Trump’s disapproving comments on Theresa May‘s new ‘soft Brexit’ negotiating plan. According to Trump, the updated Brexit deal could endanger the likelihood of a US-UK trade deal after the country officially leaves the European Union, which increased the selling pressure on the pound. The pound’s initial recovery was triggered by hawkish comments from the Bank of England Deputy Governor, Jon Cunliffe who stated that weak economic growth in Q1 was largely due to bad weather and that the UK’s growth plan remained intact.
The currency pair later rallied higher after the release of weak US data such as the disappointing University of Michigan consumer sentiment survey, which missed expectations. The weak US import price index data also contributed to the greenback’s retracement as tracked by the US Dollar Index.
Given the upcoming weekend, the currency pair’s future performance is likely to be affected by geopolitical events including Brexit headlines.
The GBP/USD currency pair was trading at 1.3216 as at 16:49 GMT having recovered from a daily low of 1.3125. The GBP/JPY currency pair was trading at 148.63 having rallied from a low of 147.63.
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