- No-deal Brexit fears/Carney’s overnight dovish comments continue to weigh on the GBP.
- Sentiment deteriorates further following yet another disappointing release of the UK PMI.
The GBP/USD pair held on to its weaker tone and dropped to fresh two-week lows, around mid-1.2500s in reaction to weaker UK PMI print.
The pair extended its pullback from over one-month high level of 1.2784 and remained under some selling pressure for the third consecutive session on Wednesday – also marking its sixth day of downfall in the previous seven.
Against the backdrop of persistent fears of a no-deal Brexit on October 31, the already weaker sentiment surrounding the British Pound deteriorated further following the BoE Governor Mark Carney’s dovish comments on Tuesday.
Carney’s remarks added to this week’s awful UK macro releases – Wednesday’s services PMI being the latest, and continued dragging the pair lower, with the prevailing US Dollar selling bias doing little to ease the bearish pressure.
Reviving safe-haven demand triggered a fresh leg of a downfall in the US Treasury bond yields, which fell to multi-year lows and kept the USD bulls on the defensive, though failed to inspire bullish traders or stall the ongoing slide.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or continues with its bearish trajectory amid UK political and economic uncertainty as the focus now shifts to US macro data.
Wednesday’s US economic docket features the release of ADP report on private-sector employment, which will be followed by ISM non-manufacturing PMI and contribute towards providing some short-term impetus.
Technical levels to watch
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