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Pound Tumbles on Brexit Hurdles as UK Reiterates Hardline Stance

May 27, 2020 at 19:05 by Simon Mugo

50 pound notes and some coins on the UK flag

The Sterling pound today fell against the US dollar reversing most of yesterday’s gains as the British government reiterated its hardline stance on the December deadline. Investors sold the GBP/USD currency pair amid despair at the lack of progress, which increases the likelihood of the UK not signing a trade deal with its largest trading partner.

The GBP/USD currency pair today fell from a daily high of 1.2353 in the London session to a low of 1.2205 in the American session but was off these lows at the time of writing. 

Negative headlines battered the currency pair during the London session as the fallout from Dominic Cummings‘ actions continued to rock the Conservative Party. Over 40 MPs have so far criticised the actions by Boris Johnson‘s chief adviser even as the PM dismissed the allegations against his top strategist. Other headlines indicating that the Brexit talks between the EU and the UK were facing significant challenges also did not help the pair. The British government has stuck to its December 31st deadline frustrating efforts by EU negotiators led by Michel Barnier to extend the transition period.

The cable’s price action was the polar opposite of the greenback’s as tracked by the US Dollar Index, which dipped lower before rallying higher as the pair fell. The upbeat US Richmond Fed manufacturing index for May also boosted the dollar driving the pair to its daily lows.

The currency pair’s future performance is likely to be affected by geopolitical events and US dollar dynamics.

The GBP/USD currency pair was trading at 1.2248 as at 19:04 GMT having fallen from a high of 1.2353. The GBP/JPY currency pair was trading at 131.92 having dropped from a high of 132.99.

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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