The British pound fell below the 1.2480 mark against the US dollar this morning. As many times in recent days and weeks, we have addressed the issue that the pound is directly “on the edge”. Now it has fallen off the edge, even if only minimally. The reason for this is a recent survey, according to which the British gross domestic product is said to have fallen after years of growth in the second quarter, which has just ended. The minus is expected to be 0.1%. We will find out exactly about this tomorrow morning!
Current situation in British pounds
The first chart shows Pound vs US Dollar since Friday. It is currently trading only 19 pips below the 1.2480 level.
The following chart shows the Pound vs. US Dollar in the big picture since October 2018. Here you can see that the big support from December has now been breached. The only question is: is the exchange rate now quickly heading further downwards? It is likely that the currency market will wait for tomorrow morning and whether GDP will really be negative. After that the eyes of the market should be on the development of the US dollar again. But even more important in the next few days in July will be the absentee ballot of Torie supporters, with Boris Johnson very likely to become the new prime minister on the island. Technically the way down seems to be open for the Pound (this is of course no guarantee for really falling prices!).