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British pound gets back to the year’s minimum due to Brexit concerns
On Wednesday, the British pound headed south, demonstrating the lowest reading since the beginning of the year versus its key rival - the evergreen buck. The given tumble was eventually provoked by renewed concerns as for the everlasting talks on Britain's withdrawal from the European Union and also relatively moderate wage growth in this country.
On Tuesday, the British government told that in June it’s all geared up towards publishing detailed plans for future relations with the European Union, in an attempt to overcome the impasse in the Brexit negotiations.
The disagreements within the government about the future of cooperation with Brussels along with repeated complaints from European officials for lack of clarity regarding what Great Britain wants, persuaded market participants that Brexit talks still pose a real threat to the British pound, less than a year before the United Kingdom should finally abandon the European trading block.
Published on Tuesday, data disclosed that British employers hired far more staff members than expected in early 2018. These statistics might clearly indicate that the weakness of the British economy observed at the beginning of the year might turn out to be temporary.
However, wage surge statistics remain mixed, with annual increases in wages, excluding bonuses, of up to 2.9% for the three months to March, as market experts interviewed by Reuters had hoped for.
As a matter of fact, the major UK currency headed south by approximately 0.2%, coming up with an outcome of nearly $1.3479, trading near the minimum of 2018 - $1.3452, which was demonstrated on Tuesday.
In relation to the common currency, the British pound managed to tack on by up to 0.1%, ending up with a reading of about 87.560 pence for the single currency.
The overall market sentiment is risk-on. The S&P 500 index (US 500) is getting close to the all-time high. Oil is recovering quickly from its recent losses.
What will happen? The FOMC statement will be published at 21:00 MT (GMT+3) on Wednesday, July 28…
PMI reports from the EU, the UK, and the USA will be released during the day!