A slew of macroeconomic reports was released today, and most of them were positive. Yet the Great Britain pound reversed its earlier gains nonetheless as the Brexit drama continued with some negative developments.
According to news released overnight, Britain’s officials secured a “legally binding” changes to the Brexit agreement with the European Union, which should prevent the Irish backstop from extending indefinitely. The news increased hopes for orderly Brexit. Yet Britain’s Attorney General Geoffrey Cox dashed such hopes, saying that legal risks remain. He said, talking about “a situation where, despite the parties properly fulfilling the duties of good faith and best endeavours, they cannot reach an agreement on a future relationship,” that:
Were such a situation to occur, however, let me make it clear. The legal risk, as I set it out in my letter of the 13th of November, remains unchanged.
As for economic data, the Office for National Statistics reported that Britain’s gross domestic product increased 0.5% in January from December, exceeding the average forecast of 0.2% increase. Manufacturing production rose 0.8% in January from the previous month, whereas economists had also predicted an increase by just 0.2%.
GBP/USD declined from 1.3188 to 1.3110 as of 15:52 GMT today. GBP/CHF dropped from 1.3322 to 1.3204. EUR/GBP advanced from 0.8527 to 0.8604.
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