Pound Strengthens Over Hopes of Possible Brexit Delay

Early on Wednesday, the Pound has pulled back slightly higher against the dollar after falling to a three-year low under the key 1.20 level. After opposition parties defeated Johnson in Parliament in an effort to stop a no-deal Brexit, the Pound has regained some strength while the dollar has slipped lower after US manufacturing sector weakened in August.

At the time of writing, GBP/USD is trading at around 1.21, as traders anticipate yet another delay in Brexit caused by general elections. Lawmakers from across parties voted to defeat Johnson and have called for a vote on Wednesday which could potentially force Johnson to request the EU to delay Brexit until a deal has been reached.

GBP/USD also gained some strength as the dollar edged down after US manufacturing contracted for the first time in three years during August. The ISM manufacturing index fell to 49.1, below the 50 threshold, indicating a shrinking in factory activity. This news has caused the US dollar to edge 0.4% lower from its peak reached on Tuesday.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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