Fundamental Comment

Pound hovers near 6-month low on renewed Brexit concerns

Pound hovers near 6 month low on renewed Brexit concerns

The pound fell against the US dollar on Tuesday, hovering close to its weakest level in six months, amid continuing concerns about Brexit, where the release of upbeat U.K. data failed to provide support.

The GBPUSD pair fell 0.50 percent to 1.2451, as of 09:38 GMT, following overnight losses of 0.5 percent. Falling below 1.2397 may push the pound down to its lowest level since April 2017 recorded at $1.2365.

Versus the euro, the pound pushed the EURGBP pair higher to a top at 0.9041, the highest level since January 11.

The pound has come under pressure due to investors’ concerns that Boris Johnson could win the Conservative leadership contest to become Britain's next Prime Minister at the end of this month.

Data released earlier today showing a more than forecast rise in U.K. wage growth to the highest since 11 years in the quarter ended May and the stability of the unemployment rate at its record low of 3.8 percent failed to provide support for the pound.

Meanwhile, the U.S. dollar rose against major currencies in Tuesday's trading, ahead of the release of U.S. retails sales and important speech by Fed Chair Jerome Powell.

U.S. Treasury Secretary Steven Mnuchin expects U.S. Trade Representative Robert Lazard to hold phone talks with Chinese partners this week.

The United States and China agreed at the end of last month to resume trade talks after they were suspended in early May.

The dollar index, which measures the performance of the currency against six major currencies, rose 0.25 percent to 97.758. 

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