The Pound tested its “bottom” and rebounded. Overview for 04.09.2019

After updating the low reached on October 3rd, 2016, GBPUSD was able to start a correction.

The British Pound remains very sensitive to investors’ mood swings due to political turmoil in the United Kingdom. The current quote for the instrument is 1.2104.

Yesterday, the Pound was trading at 1.2957, the levels is last reached on October 3rd, 2016. The local “bottom” is at 1.1943. 

The British Parliament continues experiencing difficulties even after Prime Minister Boris Johnson put it “on hold” until October. Recently, one of the Liberal Democrats has quit from the Parliament, because he was worried that the Brexit might take the road that is devastating for the country. Johnson himself reminded one more time that the United Kingdom would exit the European Union on October 31st with or without a deal; still, he believed that the parties may yet come to an agreement. However, if the British Parliament blocks the decision to exit the alliance without a deal, everything that Johnson is trying to do will be in vain. Next Monday, Johnson is planning to meet the Irish Prime Minister, because there are still some issues with the border. There is no universal solution despite Johnson’s efforts to prove the contrary, that’s why he will have to compromiseю  

Yesterday, the United Kingdom reported on the Construction PMI, which was 45.0 points in August after being 45.3 points in July and against the expected reading of 46.7 points. The indicator remains below the psychologically important level of 50 points, which separates decline form growth, and that’s bad news for the British currency.