The Sterling pound today traded lower against the US dollar as markets awaited the crucial meeting between the British PM Theresa May and her cabinet to approve the draft Brexit deal. The pound declined further following the release of weak UK consumer price index report in the early London session, which further soured investor sentiment towards the Sterling.
The GBP/USD currency pair today dropped from an opening high of 1.3025 to a low of 1.2886 before retracing some of its losses.
The currency pair’s decline was largely fueled by the uncertainty surrounding PM May’s leadership amid the ongoing dissent within her Cabinet and in Parliament regarding her approach to the Brexit negotiations. The pair headed lower after the UK’s Office for National Statistics released the CPI data for October, which came in at 0.1% missing expectations set at 0.2%. The annualized headline CPI print came in at 2.4%, while the core CPI print was recorded at 1.9%; both prints missed expectations by 0.1%. The weak retail price index data also contributed to the pair’s decline, while the upbeat producer price index and house price index releases helped reduce the pair’s losses.
The pair retraced some of its losses as news headlines indicated that the government expects its coalition partner, the Northern Irish DUP to support PM May’s Brexit plan.
The release of the US CPI data later today, and the outcome of today’s Cabinet meeting will be the main drivers of the cable’s performance over the short-term.
The GBP/USD currency pair was trading at 1.2951 as at 12:36 GMT having dropped from a high of 1.3025. The GBP/JPY pair was trading at 147.53 having fallen from a high of 148.43.
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Pound Falls on UK Political Uncertainty Amid Weak Inflation Data
