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Signs that the Brexit is already taking its toll are accumulating. A mix of surveys, news reports and a political turmoil is taking over.

GBP/USD is falling once again, over 100 pips and back to the 1.31 handle. The low so far is 1.3162, above the 1.3115 level that provided  was the the lowest level since 1985.  Can it break to even lower ground?

Update:  UK Services PMI not so terrible – GBP slips anyway to new 31 year low

What is hurting the pound?

  1. Political fallout: All the  protagonists of Brexit have now retired: PM David Cameron which initiated the referendum has quit immediately, the man that jumped on the Brexit train and led the campaign Boris Johnson quit and finally the long term  Brexit  proponent Nigel Farage quit. The Conservative party is moving along to elect a new leader and the future of relations with Europe remains uncertain, It is unclear if the UK will get the “Norwegian deal” meaning a de-facto membership without a say in decisions or a significant worsening of conditions.
  2. Rush to the  exits: Standard Life suspended withdrawals from its property fund as  it cannot fulfill requests from customers to  get their money out. They would need to sell  property first. Other  funds could follow. This joins reports that  British companies  are seeing a big drop in orders from the continent. The near future is not so positive.
  3. Business surveys: Markit’s construction PMI has dropped to the lowest level since 2009. At 46 points,  we see  significant contraction. Also the euro-zone Sentix Investor Confidence crashed. Also YouGov’s poll shows growing pessimism. We will soon get the latest  Services PMI from the UK.

See how to trade the Services PMI with GBP/USD

GBPUSD July 5 2016 tumbling down