The British, also known as the sterling, fell against the dollar in the benchmark GBP/USD Forex market yesterday and today during the Asian trade hours. The Sterling has fallen to its lowest level in a year and a half against the U.S. currency.
The Sterling plummeted after U.K. Prime Minister Theresa May, on Monday, postponed a parliamentary vote on Brexit. This reignited trader worries about the United Kingdom’s exit from the European Union in March.
The British Parliament was scheduled to vote o the prime minister’s Brexit plan today. Her opponents Joined supporters of Brexit against her deal. Yesterday, as of 2:44 p EST, the British pound was down 1.3 percent to trade at $1.2559.
Unlike the Sterling, Traders Support the US Dollar
The dollar index, which measures the greenback in a basket with six other currency majors, was up a bit this morning. The dollar had been under pressure since last week as the dollar fell to its lowest level in three months. Traders are reducing rate hike expectations as the Federal Reserve might slow down its rate hike cycle sooner than expected.
The dollar index firmed against the pound and the euro Traders are reducing earlier bets and looking at a less aggressive Federal Reserve monetary policy into 2019.
Widening rate differentials between the Fed and the rest of the world’s central banks has fueled the surprising dollar rally this year. That is now winding down.