Pound Drops on Brexit and Political Jitters Amid BoE Speeches

The British pound today declined slightly against the US dollar even as Brexit jitters continued to weigh down the cable. The pound was further affected by the DUP’s resistance to the current Brexit deal given that Theresa May needs the 10 votes from DUP members led by Arlene Foster in order to have a majority in the House of Commons.
The GBP/USD currency pair today traded between a high of 1.2883 and a low of 1.2822 and was within this range at the time of writing.
The currency pair traded in a tight consolidative range during the Asian session before expanding its trading range starting in the early European session. Brexit uncertainty continued to plague the currency pair after Spain stated that it would not support the current Brexit deal if the text on Gibraltar was not changed. The fact that the DUP  increased pressure on Theresa May’s government regarding the Brexit deal also affected the cable’s gains. The pair rallied briefly following the speech by Bank of England Governor Mark Carney in Parliament where he sounded optimistic about a smooth Brexit.
During the Parliamentary hearing of the BoE’s November inflation report, Carney stated that a no-deal Brexit would present an unusual situation for the UK. The BoE’s Chief Economist Andy Haldane also stated that Brexit uncertainty was negatively affecting UK businesses.
The currency pair’s future performance is likely to be affected by Brexit headlines and tomorrow’s UK public sector finances report.
The GBP/USD currency pair was trading at 1.2840 as at 14:44 GMT having dropped from a high of 1.2883. The GBP/JPY currency pair was trading at 144.45 having declined from a high of 144.92.

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