The British pound today dropped to new yearly lows in the American session after European Union officials insisted that they would not reopen Brexit negotiations. The pound made an about-turn after rallying higher in the early European session on positive Brexit news from Ireland regarding the Irish backstop amid positive UK jobs data.
The GBP/USD currency pair today dropped from from a session high of 1.2639 to a low of 1.2492, which was slightly below yesterday’s record lows.
The cable’s initial rally was triggered by comments from Irish Deputy Prime Minister Simon Coveney stating that the EU might reconsider its position on the Irish backstop plan. The currency pair was further boosted by the latest UK labour market report released by the Office for National Statistics. According to the report, the average weekly earnings in the three months to October grew by 3.3% versus the expected 3.0% print, while the core earnings also beat expectations by 0.1%. The ILO unemployment rate remained stable at 4.1%, while the country created an additional 79,000 jobs. The jobless claims were also lower than the previous figure.
News reports that German Chancellor Angela Merkel reportedly told British Prime Minister Theresa May that the Brexit deal could not be renegotiated triggered the pair’s decline. PM May may also face a vote of no-confidence due to the revolt by MP’s against her current Brexit deal.
The currency pair’s future performance will continue to be affected by Brexit headlines over the short-term.
The GBP/USD currency pair was trading at 1.2516 as at 17:29 GMT having dropped from a high of 1.2639. The GBP/JPY currency pair was trading 141.87 having fallen from a high of 142.93.
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