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British Pound Touches Its Lowest Level Since October Against US Dollar

January 3, 2017 at 19:20 by Yahia Barakah

20-pound banknotesThe British pound touched its lowest level in two months against the US dollar on Tuesday, as the greenback gained more strength against its main peers. Traders expect the US currency to continue its strong performance in the first quarter of 2017.

The British pound rose to its highest level in two weeks against the euro earlier today, after a new reading for manufacturing activity in the United Kingdom showed more gains than expected. The monthly purchasing managers’ index rose to 56.1 in December, which marks its strongest level since June 2014. Median forecast pointed to a drop to 53.1.

However, the pound lost its early gains against the dollar as the manufacturing purchasing managers’ index in the United States touched its highest level in two years last month. The US currency was supported to its strongest level against the pound since October following the manufacturing activity reading.

2016 was not a positive year for the pound, as the British currency lost 16% against the dollar and 14% against the euro. The main driver for the decline, which is the currency’s worst in 8 years, was the British vote to leave the European Union on June 23.

GBP/USD traded at 1.2244 as of 18:50 GMT on Tuesday, after touching 1.2202 at 15:20, the pair’s lowest level since October. GBP/USD opened trading today at 1.2285. EUR/GBP traded at 0.8507, from 0.8513 at the beginning of the day.

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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