The pound was weaker on Wednesday as uncertainties around the UK’s exit from the European Union continue to cause concern amid a quiet spell for macroeconomic data.
As the euro climbed above 0.92 on Wednesday, buoyed by strong manufacturing PMIs for Germany and the euro-zone, investors would have recalled Morgan Stanley suggesting parity with the euro could be a reality as early as 2018, earlier this month.
EUR/GBP was 0.9207, up 0.38% at 10:50 GMT. The single currency's highest level for eight years.
Cable dipped below 1.28 on Wednesday despite the greenback’s vulnerability following President Trump’s remarks on Tuesday regarding suspending the NAFTA treaty with Canada and Mexico, and shutting down the government in order to fund the controversial border wall between the USA and Mexico. GBP/USD was down 0.20% at 1.2798.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped just 0.09% to 93.34.
Despite relatively encouraging data to come out of the UK on Tuesday, such as robust manufacturing data from the Confederation of British Industry and the UK’s first budget surplus for July in fifteen years, sterling made losses against most major currencies, it continued its losses into Wednesday.
Sterling dropped against safe haven currencies. GBP/JPY was down 0.41% to 139.93, while GBP/CHF was down just 0.11% at 1.2397.
The pound fared a little better against commodity currencies. Following the release of New Zealand’s economic forecast, GBP/NZD was up 0.60% to 1.7724. GBP/AUD was steady at 1.6206, a decline of just 0.01%.
GBP/CAD was down 0.14% at 1.6088.
Many investors are awaiting the Jackson Hole Symposium, a meeting of central bankers, which begins in Wyoming on Thursday. Fed Chair Janet Yellen will speak on Friday at the symposium, and many will be looking for clues about a third rate hike for 2017.European Central Bank President Mario Draghi is also one of Friday's keynote speakers.
The release of the UK’s Q2 GDP on Thursday will add clarity to the economic situation of the UK.