Reality appears to be catching up with the pound. Weekend headlines that pro-Brexit MPs within the Conservative Party were offering an olive branch to Theresa May were not enough to give sterling the support it needed to maintain its strong levels.
The pound lost ground across the board yesterday. A negative UK construction PMI release did not help matters too. The report displayed the sector is now in contractionary territory. Such a reading is to be expected as we rapidly approach the 29th March deadline. However, the fact it could be expected doesn’t offer any solace and is a clear indication of the incompetence displayed on all sides of this political process.
GBPUSD has now broken $1.32 and firmly trades with a $1.31 handle. The pound has also lost value against the euro as the currency pair appears to want to test the €1.16 price to the downside. The next major test for the sterling arrives as early as this morning. Services PMI will be released at 0930. This is one of the most important indicators for the health of the UK economy. A soft figure could offer another negative catalyst to help GBP on its journey lower.
Written by Viv Savani. 8:18am, March 5th 2019
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