The British pound today fell to new lows against the US dollar based on the uncertainty surrounding the Brexit negotiations as both the EU and the UK stick to their opposing positions. The GBP/USD currency also headed lower following the release of the latest UK manufacturing data, which revealed zero expansion in the sector.
The GBP/USD currency pair today dropped from a high of 1.2934 in the Asian session to a low of 1.2854 in the mid-European session.
The currency pair was negatively affected by the comments made by the Chief EU negotiator Michel Barnier over the weekend where he stated that he opposes the UK’s Brexit plan. Most investors interpreted this as a negative for the pound given that British Prime Minister Theresa May insists on sticking with her current Brexit plan. This news was especially negative given that investors’ hopes for a smooth separation were raised last week following the resumption of talks between the EU and the UK.
The release of the Markit/CIPS UK Manufacturing PMI in the early European session also drove the pair lower as the print missed expectations to come in at record 25-month lows. The PMI print came in at 52.8 in August versus the expected 53.9. Given that today was Labor Day in the USA, the pair’s performance was largely driven by the Brexit developments.
The pair’s performance is likely to be influenced by tomorrow’s UK Construction PMI and the US ISM Manufacturing PMI.
The GBP/USD currency pair was trading at 1.2880 as at 16:15 GMT having dropped from a high of 1.2934. The GBP/JPY currency pair was trading at 143.01 having declined from a high of 143.63.
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