Pound Falls Ahead Of PM Boris Johnson's New Brexit Plan
October 02 2019 - 02:55AM
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The pound slipped against its major counterparts in the European
session on Wednesday, as the nation's construction sector
contracted further in September and investors awaited Prime
Minister Boris Johnson's speech outlining final Brexit offer at the
Conservative Party's annual conference today.
Survey data from IHS Markit showed that the U.K. construction
Purchasing Managers' Index fell to 43.3 in September from 45.0 in
August. The score was forecast to remain unchanged at 45.0.
This was the second strongest contraction since April 2009. Any
reading below 50 indicates contraction.
Johnson is expected to take a tough stance on Brexit, with
investors cautious about his plan being accepted by the European
Union.
The Telegraph reported that the new plan proposes Northern
Ireland following single market rules until 2015, replacing the
backstop proposal.
The pound declined to 0.8919 against the euro from Tuesday's
closing value of 0.8879. On the downside, 0.91 is likely seen as
the next support level for the pound.
The pound that closed Tuesday's trading at 1.2301 against the
greenback edged lower to 1.2227. Next immediate support for the
pound is seen around the 1.21 region.
The pound dropped to 131.62 against the yen, its lowest since
September 9. The currency is likely to face support around the
129.00 region.
Data from the Cabinet Office showed that Japan's consumer
confidence fell to the lowest level in more than eight years in
September.
The consumer confidence index fell to a seasonally adjusted 35.6
in September from 37.1 in August.
On the flip side, the pound rose to 1.2264 against the franc and
held steady thereafter. The pair ended yesterday's trading at
1.2219.
Data from the Federal Statistical Office showed that Swiss
consumer price inflation eased to the lowest in 33 months in
September.
Inflation eased to 0.1 percent in September from 0.3 percent in
August. Economists had forecast the rate to remain unchanged at 0.3
percent.
Looking ahead, U.S. ADP private payrolls for September is due to
be released at 8:15 am ET.
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