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Pound Drops on Brexit News, Rallies on Weak US Services PMI

May 3, 2019 at 15:37 by Simon Mugo

Many 20-pound notesThe Sterling pound today fell to its daily lows in the early London session after it emerged that the UK government had made little progress in cross-party Brexit talks. The GBP/USD currency pair later rallied higher in the American session following the release of weak US non-manufacturing/services PMI and ignored the upbeat US jobs data.

The GBP/USD currency pair today rallied from a low of 1.2987 to a high of 1.3110 in the American session and was headed higher at the time of writing.

The currency pair today traded sideways during the Asian session before dipping lower in the early European session. The pair dropped lower after Labour Party leader Jeremy Corbyn told reporters that the Brexit debate would head back to Parliament if the two parties could not reach a compromise. His comments triggered fears that Theresa May‘s government was not willing to compromise on key issues. Investors also concluded that the Britain would participate in the European Parliament elections slated for later this month. The pair ignored the release of the upbeat Markit/CIPS UK services PMI earlier in the session.

The cable rallied higher in the American session despite the release of upbeat US NFP report. The pair capitalized on the greenback’s weakness as tracked by the US Dollar Index, which hit a low of 97.49 to rally to new daily highs.

The currency pair’s performance over the upcoming weekend is likely to be influenced by geopolitical events.

The GBP/USD currency pair was trading at 1.3160 as at 15:23 GMT having risen from a low of 1.2987. The GBP/JPY currency pair was trading at 146.22 having rallied from a low of 144.78.

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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