The British pound today dropped to new daily lows following warning comments made by the European Union’s chief Brexit negotiator, Michel Barnier regarding the latest Brexit deal. The pound’s decline was further weighed down by a warning from the BoE Governor Mark Carney that most UK businesses are ill-prepared for a no-deal Brexit scenario.
The GBP/USD currency pair today dropped from an Asian session high of 1.2850 to a low of 1.2755 in the mid-European session.
The currency pair’s decline begun in the late Asian session as the greenback started making gains against the Sterling pound. The pair’s drop accelerated in the early European session following Michel Barnier’s warning that the EU would not offer Britain another deal, which caused investors to flee the pound. The warning by Mark Carney that UK businesses were unprepared for a no-deal Brexit also created anxiety in the markets, which extended the pair’s drop. The mixed money and credit report for October released by the Bank of England had a muted impact on the currency pair.
The fact that the US dollar was recovering from yesterday’s dovish comments by the Federal Reserve Chairman, Jerome Powell also contributed to the pair’s decline. The US Dollar Index had rallied to a high of 97.01 at the time of writing.
The currency pair’s short-term performance is likely to be influenced by the release of the US PCE and jobless claims data scheduled for later today.
The GBP/USD currency pair was trading at 1.2770 as at 12:10 GMT having dropped from a high of 1.2850. The GBP/JPY currency pair was trading at 144.71 having fallen from a high of 145.69.
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British Pound Heads Lower on Barnier and Carney Brexit Warnings
