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Sterling Drops on Market Sentiment, Brexit Fears

August 31, 2018 at 14:01 by Vladimir Vyun

GBP 50 banknote lying on some GBP 20 banknotesThe Great Britain pound declined today due to the negative market sentiment and concerns that the United Kingdom will leave the European Union without securing a trade deal first. The sterling was heading to weekly gains, but will likely end August with the fifth consecutive monthly drop.

The GfK consumer confidence improved to -7 in August, while analysts had expected it to stay at the same -10 level as in July. The Nationwide House Price Index dropped 0.5% in August. It was a worse reading than an increase by 0.1% predicted by specialists and the 0.7% advance registered in July.

The theme of the Brexit remained a hot topic, likely to affect the pound for a while. The UK and EU officials are scrambling to reach an agreement on trade before Britain completes its separation from the EU, and Brexit Secretary Dominic Raab voiced optimism, saying that he is “confident that a deal is within our sights.” Yet there are plenty of doubts that this is the case, and markets have started pricing in a “hard” Brexit.

GBP/USD edged down from 1.3005 to 1.2966 as of 13:53 GMT today. EUR/GBP advanced from 0.8968 to 0.8988 intraday before pulling back to 0.8971. GBP/JPY declined from 144.37 to 143.67.

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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