- Cable hit by fresh UK political woes, with PM May to quit.
- The potential collapse of the cross-party Brexit talks and trade war-led risk-off weigh.
- Eyes on UK political development and US data for fresh directives.
The GBP/USD pair fell for the third straight session and refresh four-month lows at 1.2775 levels, as the offered tone around the pound strengthened amid deteriorating UK political scenario.
Markets are already pricing in that the ongoing Brexit negations between the ruling Tories party and opposition Labour will end without reaching a deal. Meanwhile, Labour party source recently commented, “there is no point doing a deal with a government which is about to collapse” that added to the latest leg down in the spot.
Adding to the bearishness, the risk sentiment continues to play a spoilsport amid escalating US-China trade tensions. The latest reports cite that China is not keen on having trade talks with the US and is considering over suspending the trade talks. The higher-yielding/ risk currencies such as the GBP tend to suffer amid panic and market unrest.
Further, the macro-economic divergence also continues to weigh on the Cable, with the US dollar hovering near two-week tops across its main competitors, in light of the recent upbeat US fundamentals.
Looking ahead, “US consumer sentiment will be of interest. See Michigan Consumer Sentiment Preview: Growth, jobs and sentiment. Overall, political developments in the UK and also later in the US are set to dominate,” FXStreet’s Senior Analyst, Yohay Elam notes.
GBP/USD Technical Levels
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