With less than three months left before Britain is expected to leave the European Union, investor fears are escalating on concerns that the split will not be favorable. As a result, the GBP/USD fell to a 31-month trough, with additional pressure being felt given the Conservative Party's now narrowed Parliamentary majority which is down to a single seat after twin victories for the Liberal Democratic party in a by-election vote. The Tories ability to pass any legislature related to the Brexit will now be even more difficult, say analysts, which will ratchet up worries of a hard Brexit.
As reported at 10:56 am (GMT) in London, the GBP.USD was trading at $1.2138, down 0.2015%; the pair earlier hit a trough of $1.2102 while the session high is at $1.2188. The EUR/GBP is higher at 0.9187 Pence, a gain of 0.5967%; the pair ranged from 0.91327 Pence to 0.91993 Pence.
UK Data Eyed
Markets will turn to data this week to help drive sentiment. Earlier today, the Markit survey for the UK Services sector was released for the month of July. Markit reported a reading of 51.4, markedly better than the flat 50.2 reading that economists had predicted. The report on housing prices will be released on Wednesday with an across-the-board fall predicted. On Friday, the UK's Office of national statistics will release UK growth data for the 2nd quarter. The latest poll suggests that GDP will fall to 0.0% from 0.5% on a quarter-over-quarter basis, and slide to 1,4% from 1.8% on a year-over-year basis. The readings on manufacturing and industrial production will also be released on Friday with analysts calling for another decline.