Comments made by the U.K.’s Finance Minister sent the Pound Sterling tumbling after it stoked concerns about a hard Brexit. Sajid Javid said in a Saturday interview that Britain was not likely to maintain EU trade rules, which was perceived as a threat to those businesses that had been hoping to ease the checks across the border after the transition period is concluded. One currency strategist said that the discussion on divergence from the Eurozone would limit access to those markets; FX traders responded to that consideration with negative sentiment.
In London trade at 11:17 am, the EUR/GBP was trading higher at 0.8529 Pence, a gain of 0.0575% and off the earlier peak of 0.85540 Pence. The GBP/USD was lower at $1.2994, down 0.1084%; the pair has ranged from a trough of $1.29617 to a high of $1.30253.
UK Labor and PMI Data in Focus
Ahead for the UK economy which could be a market mover will be Friday’s release of January’s PMI data on the manufacturing and services sector. Analysts are predicting a rise in the preliminary manufacturing PMI to 48.8, and a rise in the services sector to 50.9. In the nearer term, markets will focus on tomorrow’s release of labor data for the UK. The ILO employment rate is expected to remain steady at 3.8%, while average earnings for the rolling 3-month period through to November is predicted to have fallen, both with and without bonuses.