Sterling Falls on Weak UK Data As Tory Leadership Contest Heats Up

The Sterling pound today fell almost to one-week lows after the release of a raft of disappointing macro data from the UK docket such as the April GDP print. The GBP/USD currency pair remains under pressure as the Conservative Party‘s search for a successor to the outgoing Prime Minister Theresa May officially kicks off.
The GBP/USD currency pair today fell from an opening high of 1.2728 in the Asian session to a low of 1.2653 in the mid-London session before retracing some of its losses.
The currency pair opened today’s session with a bearish bias as the US dollar rallied higher after the relief from Mexican tariffs. The pair kept falling in the London session following the release of the UK GDP data for April by the Office for National Statistics. The GDP print came in at -0.4%, which was a larger drop than the expected 0.1% decline. The industrial production data released at the same time also missed expectations by registering a 2.7% contraction instead of the anticipated 1.0% drop. The manufacturing production and construction output prints also missed consensus estimates.
The cable was also affected by the UK leadership contest where Boris Johnson is currently in the lead to become Prime Minister. However, he faces stiff competition from Jeremy Hunt, the current Foreign Minister who has the support of Defense Secretary Penny Mordaunt and Pensions Secretary Amber Rudd.
The currency pair’s future performance is likely to be affected by tomorrow’s UK jobs data and geopolitical events.
The GBP/USD currency pair was trading at 1.2691 as at 17:45 GMT having fallen from a high of 1.2728. The GBP/JPY currency pair was trading at 137.69 having dropped from a high of 138.26.

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