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Great Britain Pound Performs Decently Under Pressure from Negative Fundamentals

August 30, 2019 at 22:54 by Vladimir Vyun

50 pound notes and some coins on the UK flagThe Great Britain pound was soft against its most-traded rivals today. Yet it performed not nearly as bad as one could expect considering unimpressive macroeconomic indicators and ever-increasing chances of a hard Brexit. In fact, the sterling even managed to gain on the extremely weak euro.

The GfK Consumer Confidence Index fell to –14 in August from -11 in July, with all five components showing a decline. Market participants were counting on the index to stay unchanged.

The Nationwide House Price Index showed no change in August after rising 0.3% in July. Analysts had predicted a marginal increase of 0.1%.

The sterling dropped earlier this week after Prime Minister Boris Johnson offered to prorogue the Parliament. But, while the currency continued to fall since then, market analysts argued that the drop was not particularly big and markets reacted surprisingly apathetic to the news. Some speculated that a hard Brexit was simply priced in. Others added that professional traders might see the drop as an opportunity to buy the pound while it is cheap.

GBP/USD slipped from 1.2180 to 1.2163, retreating from the session high of 1.2226. GBP/JPY edged down from 129.69 to 129.23. At the same time, EUR/GBP sank from 0.9076 to 0.9030.

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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