The British Pound (GBP) fell to 1.2970 compared to the US Dollar (USD) in early Asian trade on Monday. Despite the possibility of a Brexit delay, there is no clear Brexit agreement after lengthy negotiations between Britain and European Union leaders ahead of a key week when the British parliament will vote on various aspects of Brexit dragging the GBP/USD pair to a three-week low. Learn forex through this article about trading news.
Pound Dragged by Brexit Disappointment
Investors will be closely watching UK parliamentary elections starting March 12 to determine the direction of short-term trading. GBP/USD fell below 1.3000 as Britain rejected several EU Brexit offers before the British parliament voted on a new Brexit proposal this Tuesday. The most prominent among the EU's offers is the exit of Britain without giving concessions to Ireland.
CNBC reported that British foreign minister Jeremy Hunt said on Sunday that Brexit could be canceled if lawmakers refused an agreement to leave the government. Not only another referendum but challenges to PM Theresa May's position also increased which added further weakness into the GBP. The Sunday Times also wrote that senior Brexiteers had warned the PM team that he had to offer to leave in June.
Further news reports said some of the opposition party members had loudly warned May that he would only complete the transaction if he stopped, leaving the way open for other PMs to lead a series of subsequent negotiations on future trade relations. On March 12, members of the British Parliament elect the latest PM May Brexit proposal negotiated with the EU.
If the proposal is rejected, because it is most likely, it will open the door for a vote on no agreement out. If lawmakers refuse to leave the European Union without an agreement, they must choose a Brexit. While uncertainty surrounding Brexit drags down GBP/USD, investors may wait for the UK market to open to support the Bears. Understanding this trading news gives a good insight to learn forex.
Pound Fell as Possibility of Failing to Get Brexit Voting
The pound fell for an eighth day, the longest losing streak in 10 months, as reports circulated that Prime Minister Theresa May lost support for the Brexit vote and perhaps her own position. Sterling fell 0.4% to 1.2966 after May failed to secure significant concessions from the European Union in the last round of talks. He must postpone the vote, the Times said.
The Prime Minister faces increasing pressure to resign with only two cabinet ministers supporting him, they are now back in a situation where the inability to completely rule out Brexit on March 29, and the suggestion that May's only way to win support for his deal is if he is committed to resigning as soon as it has a disruptive effect on GBP, said Head of Foreign Exchange Strategy at National Australia Bank Ltd. in Sydney.
The Asian session sell GBP/USD to trigger large stop-loss and stop sell momentum laying below the February 22 level at 1.2968, according to FX traders based in Asia. The lack of liquidity contributed to the steepness of the decline, they said. Learn forex more on Didimax, a broker company that offers a lot of free trading news on the website.
Dollars Strengthen, Sterling Fell as Brexit Worries
The dollar moved up on Monday, moving closer to a three-month high as investors looking for safe assets amid fears of global economic growth, while sterling extended losses due to uncertainty ahead of the European Union's Brexit. The dollar that measures the greenback against six major currencies gained 0.1 percent at 97.42 in the Asian session. The euro was slightly lower at $1.1225.
The single currency has fallen to the weakest level since late June 2017 on Thursday, hurt by a dovish signal from the European Central Bank (ECB).After the ECB lowered the growth outlook for the euro area, along with weaker-than-expected Chinese export and import data, concerns about the global economy rebounded, said Masafumi Yamamoto, Head of Currency Strategy at Mizuho Securities.
