- Posted by currencies in Rate Alerts
- September 11, 2019
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British pound attempted a recovery and reached the highest level since July; however, the upside failed to gain traction. GBP seem to have bumped into a brick wall on the approach to $1.2350 despite some positive developments on Brexit front.
Speaking at a press conference with the Irish leader Leo Varadkar, the U.K. Prime Minister Boris Johnson pointed out that he would prefer to strike a Brexit deal by October.
This positive stance helped to ease concerns about hard Brexit and improve market sentiments. Traders that expected a disorderly no-deal Brexit on October 31 rushed to close their short positions and thus pushed GBP price off the recent lows.
Notably, GBP also gained support from better-than-expected macroeconomic data published yesterday. Therefore, the recent report on Industrial Production registered a minor growth (+0.1% m/m) in July, while the market expected a decrease (average forecast -0.3% m/m).
Trade balance edged higher to -9.144B in July from -8.900 billion in June; however, the market expected -9.500 billion. All-in-all, the recent statistics dispelled the fears about an imminent recession in the British economy.
Looking forward, a lot of negative Brexit-related developments have been already priced-in by the market. It means that the coin has drained its bearish potential for the time being.
Provided the Brexit delay bill gets royal approval, the risks of a messy Brexit will diminish significantly, creating a positive environment for GBP recovery.
GBP/EUR 1.1190 GBP/USD 1.2338 GBP/AED 4.5250
GBP/AUD 1.7976 GBP/CHF 1.2264 GBP/CAD 1.6237
GBP/NZD 1.9242 EUR/USD 1.1015 GBP/ZAR 18.065