British pound reaches 1-1/2 month minimums

British pound reaches 1-1/2 month minimums

On Thursday, the British pound declined to one-and-a-half month minimums versus a strengthening greenback because hopes for faster lifts in American interest rates in 2018 kept backing the US currency.

The currency pair GBP/USD reached a minimum of 1.3732, which is the weakest result since January 15.

The evergreen buck was backed after on Tuesday fresh Fed Chair Jerome Powell ascertained that the economic outlook in the United States was still upbeat, thus driving bets on further Fed rate lifts in 2018.

The remarks powered hopes that the Federal Reserve might deliver up to four rate lifts in 2018, rather than the three it had previously projected.

Hopes for rallying borrowing costs usually underpin the evergreen buck because higher rates make the American dollar more tempting to yield-seeking traders.

Market participants were waiting for Powell’s second day of congressional testimony later in the day in order to find out whether Fed Chair would reaffirm his aggressive view of the American economy or not.

The British pound was pressured after Tuesday’s data disclosed that in February British factory activity surge reached its lowest value for eight months in the face of uncertainty over Brexit.

Research company Markit told that the previous month its manufacturing purchasing managers’ index went down from 55.3 to 55.2.

The British pound was also suppressed by renewed concerns over Brexit after Theresa May, UK Prime Minister told that the EU's draft legal text uncovered on Wednesday would have Britain undermined and it would also endanger its constitutional integrity.

Versus the common currency the British pound slumped, with EUR/GBP adding 0.15% being worth 0.8875.

Thursday’s data showed that in the euro zone manufacturing activity stepped down a bit the previous month, although stood firm.

The EU’s manufacturing PMI headed south to 58.6 last month versus January’s reading of 59.6.

 

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