The British pound today dropped to new lows extending yesterday’s decline following the release of disappointing UK construction data earlier today. The GBP/USD currency pair later rallied higher following the testimony by the Bank of England Governor before the UK parliament where he promised to help smooth the Brexit process.
The GBP/USD currency pair today dropped from an opening high of 1.2868 to a low of 1.2813 in the early European session before rallying higher.
The currency pair opened today’s session being weighed by Brexit jitters and yesterday’s disappointing Markit/CIPS UK Manufacturing PMI, which fell to 25-month lows. The release of the Markit/CIPS UK Construction PMI earlier today drove the pair lower as the print came in at 52.9 missing consensus estimates set at 54.9. Shortly thereafter, the BoE Governor Mark Carney was set to testify before Parliament during an inflation report hearing. Carney’s statement that he would do ‘whatever I can’ to ensure a smooth Brexit was what lifted the pair from its daily lows.
The resurgent demand for the US dollar as tracked by the US Dollar Index also contributed to the selling pressure on the pair. The pair headed lower following the release of the US ISM Manufacturing PMI, which came in above expectations.
The currency pair’s future performance is likely to be affected by tomorrow’s UK services PMI and the US trade balance report.
The GBP/USD currency pair was trading at 1.2820 as at 14:14 GMT having retraced most of its gains following the US ISM report. The GBP/JPY currency pair was trading at 142.81 having fallen from a high of 143.25.
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