Pound Remains Vulnerable to Adverse Fundamentals

The Great Britain pound was vulnerable today amid the cautious market sentiment, persisting uncertainty surrounding the Brexit, and poor economic data.

Last week’s negotiations between the United Kingdom and the European Union did not show signs of progress towards compromise. This week, speculators turned their attentions towards debates about the Repeal bill in Britain’s Parliament that should outline laws and regulations in the independent country replacing the EU laws. Prime Minister Theresa May will face tough battle not only against the opposition Labour party, but against pro-EU rebels in her own Conservative party as well. Some analysts say, though, that traders do not particularly care about the Brexit anymore and are more interested in the question whether the Bank of England is going to tighten monetary policy in the near future or not.

Meanwhile, the seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index dropped from 51.9 in July to 51.1 in August. That is instead of an increase to 52.1 predicted by experts.

GBP/USD traded little changed at 1.2959 as of 15:03 GMT today. EUR/GBP rose from 0.9163 to 0.9191, touching the high of 0.9218 intraday. GBP/CHF opened sharply lower at 1.2442 after closing at 1.2495 on Friday and proceeded to move lower, trading at about 1.2388 as of now.

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