Pound on the Rocks as Rumours of Snap Elections Mount

It’s hard not to feel some sympathy for the British Pound which has performed poorly against its major counterparts over the past few months.
Lukman Otunuga

Heightened political risk in Westminster, chronic uncertainty over Brexit and disappointing economic data from the United Kingdom are eroding appetite for Sterling. The road ahead for the currency is filled with many obstacles and potholes, especially after Boris Johnson suspended Parliament from September 9 until to October 14. With this development set to offer nothing but more pain and punishment to the already battered Pound as no-deal fears intensify, the currency will remain one of the sick men in the G10 space.

Investors wanted nothing to do with the Pound on Monday after UK manufacturing activity plunged to a seven-year low at 47.4 in August. Hungry sellers took another shot at the currency after Prime Minister Boris Johnson summoned his cabinet ministers for an emergency cabinet meeting on Monday afternoon which sparked speculation of a snap election. Whatever the outcome of the emergency cabinet meeting, it will certainly have an impact of the Pound which remains extremely sensitive to Brexit and political developments.

This will be a week to remember with more action and volatility on the cards as Parliament returns from its summer recess. Rising fears of a no-deal Brexit should encourage investors to offload Sterling at any given opportunity.

In regards to the technical picture, the GBPUSD is under pressure on the 4-hourly timeframe (H4). A breakdown below 1.2050 should invite a move lower towards 1.2015 in the short to medium term.

Open your FXTM account today


Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US