Pound Falls On Brexit Jitters
December 03 2018 - 3:15AM
RTTF2
The pound declined against its major counterparts in the
European session on Monday, erasing its early gains, amid Brexit
worries as MPs of both houses of Parliament have demanded the U.K.
government to publish the full version of Brexit deal.
Theresa May is under pressure to publish the full legal advice
on her Brexit withdrawal deal, as lawmakers start debating her plan
this week.
May's chief Brexit adviser reportedly suggested that the
Northern Ireland "backstop" agreed in Brexit deal was a "bad
outcome" for Britain.
"If the full legal advice is not forthcoming, we will have no
alternative but to start proceedings for contempt of Parliament -
and we will work with all parties to take this forward," shadow
Brexit secretary Keir Starmer told.
Meanwhile, the opposition Labour Party signaled that it would
bring a motion of no confidence in the government if the PM loses
the Commons vote on her Brexit deal.
Survey data from IHS Markit showed that UK manufacturing sector
expanded at the fastest pace in two months in November, exceeding
economists' expectations.
The CIPS manufacturing purchasing managers index rose to 53.1
from October's 27-month low of 51.1. Economists had forecast a
score of 51.7.
The currency was higher against its most major counterparts in
the Asian session amid risk appetite, as trade tensions reduced
after U.S. President Donald Trump and Chinese President Xi Jinping
agreed to a 90-day truce in the clash between the world's two
largest economies.
The pound weakened to 0.8920 against the euro, after advancing
to 0.8863 at 3:00 am ET. The next possible support for the pound is
seen around the 0.91 level.
Data from IHS Markit showed that Eurozone's manufacturing growth
slowed less-than-expected in November, amid marginal growth in
output and weak business confidence, and was the lowest since
August 2016.
The manufacturing purchasing managers' index fell to 51.8 from
52 in October. The flash reading was 51.5.
Having climbed to a 5-day high of 1.2785 against the franc at
3:00 am ET, the pound reversed direction and weakened to a 4-day
low of 1.2693. On the downside, 1.25 is seen as the next likely
support level for the pound.
Survey data from procure.ch and Credit Suisse showed that
Switzerland's factory sector growth improved in November, defying
expectations for further slowdown, while the service sector
expansion slowed for a second straight month.
The procure.ch Purchasing Mangers' Index for industry climbed to
57.7 from 57.4 in October. Economists had forecast a score of 56.4
and above it long-term average of 55 points.
The pound dropped to near a 2-week low of 144.30 versus the yen,
reversing from a 4-day high of 145.51 touched at 2:45 am ET. The
pound is poised to find support around the 143.00 mark.
The latest survey from Nikkei showed that Japan manufacturing
PMI continued to expand in November, albeit at a slower pace, with
a manufacturing PMI score of 52.2.
That's down from 52.9 in October, although it remains above the
boom-or-bust line of 50 that separates expansion from
contraction.
Reversing from a 4-day high of 1.2825 seen at 3:05 am ET, the
pound declined to near a 5-week low of 1.2708 versus the dollar.
The pound is seen finding support around the 1.24 mark.
Looking ahead, at 8:00 am ET, Federal Reserve Governor Randal
Quarles speaks about the economic outlook and monetary policy at
the Council on Foreign Relations in New York.
New York Fed President John Williams will give opening remarks
at The Evolving Structure of the US Treasury Market conference
hosted by the Federal Reserve Bank of New York at 9:15 am ET.
In the New York session, U.S. construction spending for October
and ISM manufacturing for November are set for release.
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