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Pound Falls Against Dollar on Weak UK GDP Data, Brexit Stalement

November 12, 2020 at 18:34 by Simon Mugo
A lot of pound sterling notes of varying value

The Sterling pound today fell against the dollar following the release of weak UK GDP data as the country’s economy expanded less than expected in September. The GBP/USD currency pair’s decline was further fueled by the lack of progress in Brexit negotiations as the December 31st deadline draws near.

The GBP/USD currency pair today fell from an initial high of 1.3227 in the Australian session to a low of 1.3114 in the American session and was headed lower at the time of writing.

The currency pair’s downtrend started early today as investors mulled the stalemate in Brexit talks as the likelihood of Britain crashing out of the EU on December 31st increases. Mounting criticism of Prime Minister Boris Johnson’s handling of the coronavirus pandemic also did not help the pound. The release of the UK latest GDP report drove the pair lower. According to the Office for National Statistics, the country’s GDP expanded by 15.5% missing analysts estimates of 15.8% growth. The release of the UK industrial production report, which came in at 0.5% versus the expected 0.8% print also drove the pair lower. 

Rishi Sunak‘s comments that the country’s economy slowed down in Autumn also did not help. Comments by Brexit secretary Michael Gove that the UK had been very flexible in Brexit talks also did not boost the cable.

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

The GBP/USD currency pair was trading at 1.3111 as at 18:33 GMT having fallen from a high of 1.3227. The GBP/JPY currency pair was trading at 137.83 having dropped from a high of 139.41.

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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