British Pound Drops As Brexit Uncertainty Deepens, Later Recovers

The British pound today fell to new 4-month lows against the US dollar as the uncertainty surrounding the Brexit issue deepened. The GBP/USD currency pair hit new lows as uncertainty reigned over who would succeed Theresa May as Prime Minister and whether they would support a no-deal Brexit.
The GBP/USD currency pair today fell from a high of 1.2641 in the Asian session to a low of 1.2580 in the American session before retracing most of its losses.
The currency pair opened today’s session with a bearish bias during the Asian session driven largely by US dollar dynamics. However, the pair dipped lower from the early London session as markets opened and Brexit headlines took center stage. The pair headed lower as Philip Hammond appeared to back a second referendum or a general election as a way to break the Brexit deadlock. However, Jeremy Corbyn said he does not support a hard Brexit and promised to get a better Brexit deal from the EU. However, markets remained worried about the growing support for Nigel Farage‘s Brexit Party, which advocates for a hard Brexit. Boris Johnson has also backed a hard Brexit and is a top contender for Conservative Party leader.
The pair dropped to its daily lows in the American session following the release of mostly in-line US Q1 GDP estimates and the advance goods trade balance data.
The currency pair’s future performance is likely to be affected by tomorrow’s UK consumer lending data and US personal consumption data.
The GBP/USD currency pair was trading at 1.2611 as at 18:23 GMT having dropped from a high of 1.2641. The GBP/JPY currency pair was trading at 138.19 having fallen from a high of 138.74.

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