GBP/USD Falters as Brexit Hopes Fade

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The Prime Minister's latest attempt to assuage all parties so that they would approve her Brexit plan has disintegrated, sending the GBP/USD to a 5-month low, with the Pound also weakening against the Euro. One currency strategist in Tokyo said that the reactions were generally quite negative and the possibility of Theresa May's plan passing is even more remote now. Though the EU election results which will be released late on Sunday could have some positive impact, many believe that the Prime Minister will have little choice but to announce her imminent resignation as a result. Many analysts now believe that the chance of a no-Brexit likelihood is growing by the day.

As reported at 11:28 am (GMT) in London, the GBP/USD was trading lower at $1.2675, down 0.2495%; the pair has ranged from a trough of $1.2662 to a peak of $1.2719 in this session. The EUR?GBP was higher at 0.8812 Pence, a gain of 0.3256% and off the session peak of 0.88169 Pence.

UK Data Fails to Impress

The Office of National Statistics in the UK earlier released key economic data, and with the exception of Retail Prices and the DCLG House Price Index, predictions of consumer and producer inflation data were either on the money or a solid miss. The Consumer Price Index for April (annualized) was at 2.1%, higher than the previous 1.9% reading but missing economists' forecasts of a rise to 2.2%. Core CPI was flat at 1.8% against an expected rise to 1.9%. Most critics agree that even if the data had been upbeat, it likely would have had only a temporary response from FX markets.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.