British Pound Weakens to Lowest Level in 8 Weeks Against US Dollar

The British pound declined against the US dollar on Thursday, after concerns towards Brexit returned to the market as the end of the current month is expected to be the time when the government triggers Article 50.

Chancellor of the Exchequer Philip Hammond released the spring budget of the United Kingdom yesterday, which did not contain mentions of Brexit. However, investors believe that the government is preparing plans to shape the economy of the nation after departing from the European Union. Hammond, who decided there will be no major additional spending in the spring budget, took a safe bet that allows him enough room to move if the British economy took a bigger hit than expected from Brexit.

However, the lack of details from Prime Minister Theresa May or Brexit Minister David Davis has left investors in confusion, which is weighing on the British pound. The currency failed to rise today despite improved forecast for gross domestic product growth in 2017 by the Office for Budget Responsibility, which upgraded its estimate from 1.4% to 2.0%.

Meanwhile in the United States, the dollar continued to be supported by higher bets of an interest rate hike in the current month. There is currently a 90.8% chance that the Federal Reserve will raise US interest rates when the Federal Open Market Committee concludes a meeting that will last two days on March 15.

GBP/USD traded at 1.2162 as of 21:55 GMT on Thursday, from 1.2140 at 09:15, the pair’s lowest level since January 17. GBP/USD started the day at 1.2168.

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