Pound Falls on Weak UK Services PMI, Rallies on Support for Brexit Plan

The Sterling pound today fell to its daily lows early in the London session following the release of weak UK services PMI data for September by IHS Markit. The GBP/USD currency pair later rallied higher as British leaders expressed their support for the new Brexit proposals submitted yesterday by Boris Johnson‘s administration.
The GBP/USD currency pair fell to a low of 1.2267 in the early London session before rallying to a high of 1.2413 in the American session then retraced some of its gains.
The currency pair traded with a bearish bias during the Asian session amid a slight recovery by the US dollar. The pair recovered slightly before the release of the disappointing  Markit/CIPS UK services PMI caused the pair to fall back by coming in at 49.5 versus the expected 50.3. IHS Markit’s Chief Business Economist, Chris Williamson said that the contraction witnessed in the services sector was worrying as it is worse than the decline seen after the Brexit vote in 2016. The pair rallied higher as Johnson’s Brexit proposals garnered support from the Conservative Party and the Northern Irish DUP. However, the rally was short-lived as the European Parliament rejected the proposals.
The cable rallied to its daily highs after the release of the weak US ISM non-manufacturing PMI in the early American session. The pair has since retraced part of its earlier gains.
The currency pair’s future performance is likely to be affected by Brexit developments and tomorrow’s US non-farm payrolls data.
The GBP/USD currency pair was trading at 1.2360 as at 18:25 GMT having dropped from a high of 1.2413. The GBP/JPY currency pair was trading at 132.08 having fallen from a high of 132.54.

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