The British pound today fell to new 2-day lows against the US dollar amid a risk-off market sentiment, which favored the US dollar. The GBP/USD currency pair today broke the crucial 1.2700 support level as the markets continued to react to the uncertainty facing the UK economy due to the looming Brexit date.
The GBP/USD currency pair today rose to a high of 1.2774 before dropping to a low of 1.2656 in the mid-European session.
The Sterling pound rallied higher in the Asian session amid the risk-on market sentiment, but headed lower in the early European session. The GBP/USD currency pair was weighed down by Brexit fears even as UK businesses start preparing for a no deal Brexit scenario. Given the fast-approaching March 29 deadline and with no tangible deal on the table, a hard Brexit is highly likely. The current Brexit deal negotiated by British Prime Minister Theresa May is due to be voted on by Parliament later this month, but there is no guarantee that it will pass.
The release of the latest Markit/CIPS UK manufacturing PMI by IHS Markit in the early London session gave the cable a temporary reprieve. The manufacturing PMI print for December came in at 54.2 versus the expected 52.5 as UK businesses stockpiled resources in anticipation of a hard Brexit.
The currency pair’s future performance is likely to be influenced by tomorrow’s Markit UK construction PMI and the ISM US Manufacturing PMI.
The GBP/USD currency pair was trading at 1.2660 as at 12:17 GMT having dropped from a high of 1.2774. The GBP/JPY currency pair was trading at 138.28 having fallen from a high of 139.88.
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