Brexit Legal Battle Sends Pound Lower

Barbara Zigah

Analysts are no longer as certain of a positive outcome, meaning a Brexit deal, and some UK banks are already preparing for a no-deal scenario.

Brexit The Pound Sterling edged lower versus its two main rivals after a media report said that both the EU and Britain were no closer to an agreement on state aid, a key issue in the Brexit discussion. The Pound is also feeling pressure from the legal case that has been launched against the British government by EU officials, largely a result of the passing earlier this week of the Internal Market Bill. That bill would breach certain legal commitments previously made by Britain in the parts of the Brexit that were already negotiated. Analysts are no longer as certain of a positive outcome, meaning a Brexit deal, and some UK banks are already preparing for a no-deal scenario.

In London trading as of 11:07 am, the GBP/USD was trading at $1.2851, a loss of 0.511%, and off the session trough of $1.28190. The EUR/GBP was higher at 0.9141 Pence, a gain of 0.7562%; the pair has ranged from 0.90645 Pence to 0.91496 Pence in this session. The GBP/JPY was lower at 135.653 Yen, down 0.4009%.

Manufacturing Sector PMIs in Focus

Manufacturing surveys released today for much of the Eurozone and the UK were largely mixed. The largest economy in the EU, Germany, had a Markit PMI reading of 56.4 against an expected 56.6, while the second-largest Eurozone economy, France, had a better than expected reading of 51.2, against 50.9. Italy also failed to meet analysts' expectations with a reading of 53.2, while Spain's was slightly above the forecast at 50.8. On the whole, that gave the EU reading for the overall manufacturing sector a reading of 53.7, in line with analysts' forecasts. In the UK, the reading was off the forecast, coming in at 54.1 against an expected 54.3. Turning toward North America, analysts are forecasting that the US Manufacturing PMI reading will be 56.3 up from the previous month, while Canada's reading will show a decline to 54.1 from August's 55.1

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.

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