Pound plunged on Brexit headline controversies

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Pound sterling, Brexit headlines, GBP/USD trending points

  • Pound sterling sours as traders begin sell-off to score profit amid Brexit deal doubts
  • Sterling falls on Brexit headlines controversies, as opposition Labor Party’s finance spokesman said that few lawmakers would back PM May’s Brexit Amendments
  • Investors turned nervous again on GBP/USD fate on when and which condition, Britain would divorce EU.

GBP dropped to a-week low on growing Brexit controversies ahead of March 12 vote

On Tuesday, the 5thof March 2019, sterling took a tumble again after opposition Labour Party’s finance spokesman had said that few UK lawmakers were going to back PM May’s Brexit deal and there had been little signs of progress in the government’s talk with EU Commission.

In a highly volatile day for the British Currency, the GBP had fallen towards a seven-day low at 1.3097 after testing a daily high of 1.3199 at the mid-day European trading session. At this moment, GBP had been moving sideways between 1.31-1.32 range and residing closer to its initial support level at 1.3118, while a daily closure below 1.3050 could pivot the way downwards below 1.29 level in a near-term outlook.

GBP/USD daily price chart

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GBP/USD daily price chart

The Pound Sterling had been dropping this week, after posting a 21-week high against Euro last week and a one month high against American dollar, as traders again appeared to be worried and booking profits early on growing Brexit controversies. The British Currency had been mostly flatlined earlier in the day, however, it was dropped to by 0.6 percent to a one-week low of $.13097 in the midday European session, while the GBP was down by more than 0.5 percent against EURO to 86.47 pence per euro.

EUR/GBP daily price chart

EUR/GBP daily price chart

Apart from Labour Party’s John McDonnell’s comment on a chaotic Brexit vote outlook, the Great Britain Pound was also hit hard by media reports, which revealed on Tuesday (the 5thof March) that the EU chief negotiator, Michael Barnier and the British Attorney General would highly unlikely to seal a breakthrough in talks on Brussels.

Bottom Line

Although, the Great Britain Pound appears to be weakening at this moment, yet it is highly unlikely to lose an upbeat tone, which it had scaled up last week on fresh hopes of averting a no-deal probability.

So far in 2019, Sterling had been one of the best performing major and rose sharply in the past couple of weeks, and sterling is likely to end the day closer above 1.3150 region over a prepotent PMI (Purchasing Managers’ Index) data, which suggests that the world’s fifth largest economy by national GDP would likely to grow by 0.1 percent in the first quarter of 2019.

In January, the UK PMI fell to a three-year-low at 50.1, however, the reading edged up to 51.3 in February on a delayed Brexit vote, chance of delaying Brexit deadline by few months to a year and an eradication of a no-deal Brexit possibility.

March may have been delivering a lower GBP so far, yet there still has been significant possibility of a breach above 1.34 zone in a near-term outlook and 1.36-1.37 territory by the end of the month.

Read more on British pound here

[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]

 

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