The British Pound on Defensive thanks to Brexit Concerns

The British pound was on the defensive during the Asian trade session on Tuesday. Traders are worried that the front runner to become the United Kingdom’s next Prime Minister, Boris Johnson, is not afraid to trigger a “no deal” Brexit divorce from the European Union at the 31 October deadline.

The euro is also trading near session lows as traders are anticipating that European Central Bank President Mario Draghi will signal a rate cut by the ECB September monetary policy meeting. The ECB is delivering its July decision later this week.

During the Asian trade session currencies like the British pound were beholden to headlines as Forex traders are monitoring developments with the current trade war between the United States and China.

The dollar index was trading in a narrow trade range as currency traders are waiting on the U.S. Federal Reserve rate cut. The Fed is announcing policy on July 31. Treasury yields were lower this morning.

The British pound, against the U.S. dollar, in the GBP/USD exchange rate was near a 27 month low of 1.2382. This exchange rate is trading near 1.2477 right now.

Traders Watch Brexit News and the British Pound Weakens before Election Results

The GBP has fallen 3.5 percent against the dollar over the last three months thanks to Brexit concerns.

Traders are speculating whether or not the United Kingdom will exit the European Union with no deal. Central banks, on the other hand, are trying to figure out how dovish to go with monetary policy. This should set the tone in the Forex universe over the next several weeks.

Later today, the U.K. Conservative Party will announce the results of a leadership election. Boris Johnson expected to win, making him the next prime minister.