The pound today crashed against the US dollar amid heightened Brexit uncertainty after the UK Parliament resumed its sessions following yesterday’s Supreme Court decision. The GBP/USD currency pair fell by over 130 pips as investors expressed their lack of confidence in the UK’s future by dumping the Sterling pound.
The GBP/USD currency pair today fell from an opening high of 1.2487 to a low of 1.2349 in the American session as the UK Parliamentary session was underway.
The currency pair opened today’s session with a heavy bearish bias as investors waited for the London session to begin. The pair kept falling as it became clear that the House of Commons would be holding its first session later today. Investors were convinced that a hard Brexit was now unlikely, but other issues such as a vote of no-confidence against Boris Johnson kept investors at bay. The fact that Labour Party MPs, including Jeremy Corbyn, are calling for Johnson’s resignation was also a source of concern for investors. Investors are pricing-in a possible general election later in 2019 since it is unlikely that Johnson will get a Brexit deal by Parliament’s October 19 deadline.
The cable fell further in the American session following the release of US new home sales data for August by the Census Bureau. The new home sales rose to 713,000 versus the expected 660,000 print bosting the US dollar.
The currency pair’s future performance is likely to be affected by Brexit headlines and US dollar dynamics.
The GBP/USD currency pair was trading at 1.2351 as at 19:01 GMT having fallen from a high of 1.2487. The GBP/JPY currency pair was trading at 133.15 having dropped from a high of 134.00.
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