GBP/USD Falls Below 1.20 in Wait of Brexit-Driven Political Crisis - Forex News by FX Leaders

GBP/USD Falls Below 1.20 in Wait of Brexit-Driven Political Crisis

Posted Tuesday, September 3, 2019 by
Arslan Butt • 1 min read

GBP/USD has fallen below 1.20 on Tuesday, the lowest levels since October 2016 as all the focus shifts to the escalating political crisis surrounding Brexit. At the time of writing, GBP/USD is trading at around 1.197.

The Parliament recess comes to an end today and as lawmakers return after summer, a group of lawmakers across parties are considering requesting an emergency debate and to seize control of the agenda in the House of Commons. In a bid to stop a no-deal Brexit scenario, this group of lawmakers could very well force the Parliament to vote to stop Johnson’s plans to prorogue the Parliament.

There’s also a looming possibility of the UK being forced into early general elections. If the vote passes, Johnson could force general elections as early as October 14. However, the vote can only pass if it enjoys a two-thirds majority, a scenario which is possible only if rebel members of the Conservative Party support this move.

Rising political risks and growing concerns about the UK exiting the Union without a deal in place are exerting immense pressure on the Sterling and on UK’s economy. Markets fear that leaving without a deal could push the economy into recession and have adverse long-term impact on economic growth.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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