Sterling Pound has fallen 3% so far on a month-to-date basis against the US Dollar. It's all about Brexit related uncertainties for the GBP/USD currency pair. The escalating uncertainties and extended deadline for Brexit have jolted the sentiments of the traders.
Yesterday, Andrea Leadsom, the leader of the House of Commons, resigned from her position. In her departure statement, she stated that she is not fundamentally convinced with the current Brexit approach and supporting such a deal that she is not fundamentally convinced would make things tough for her.
Meanwhile, the pressure remains intact on the British Prime Minister as Members of the Parliament are counting days for her resignation. Yesterday, MPs made continuous calls to British Prime Minister to present her last withdrawal deal and put her papers down.
A couple of days before, Boris Johnson announced his name as the successor of Theresa May. However, some are speculating that Mrs May could meet Foreign Secretary, Jeremy Hung, who is also known to be Theresa May's trusted nominee to take her position.
However, the UK has just five months for the new EU Divorce and Brexit scheduled to take place on October 31 and odds for a disorderly divorce or softer Brexit stays.
Currency Pair Performance
1M- Daily Price Chart (as on May 23, 2019), before the market close. (Source: Thomson Reuters)
At the time of writing (before the market close, at 11:47 PM GMT), the GBP/USD pair was quoting at 1.2639 and slumped around 0.19 per cent against the yesterday’s closing price. During the past one year, the currency pair has touched a 52w high of GBX 1.3474 and a 52w low of GBX 1.2438 and at the current trading level, as quoted in the price chart, pair was trading around 6.2 per cent below the 52w high trading level and 1.6 per cent above the 52w low price, which indicates that the pair was hovering near to its 52w low trading level.
From the Exponential moving average standpoint, 10-day EMA indicates a downtrend in the pair and also reflects a bearish prospect. 10-day Relative Strength Index stood at 9.23. This level of RSI indicates a heavy selling among the traders in the GBP/USD pair.
Until Brexit gets sorted and political stability comes to the UK, sterling would continue to be a volatile currency against the major currencies, and any further devaluation would increase inflationary pressure in the UK.