Pound Falls After Boris Johnson's Remarks
03 June 2019 - 8:46PM
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The pound declined against its key counterparts in the early New
York session on Monday, after Boris Johnson, the favorite candidate
to succeed U.K. Prime Minister Theresa May, vowed that he will take
Britain out of the European Union on October 31 either with a
Brexit deal or without a deal, if he wins the leadership race.
If I get in, we'll come out, deal or no-deal, on October 31,"
Johnson said in a campaign video posted on Twitter.
May will resign on Friday, after facing backlash from MPs over
the withdrawal deal.
Besides Johnson, there are 12 other candidates to replace May as
Prime Minister.
While calling for unity in society and country, Johnson
requested voters to take part fully in the opportunities and
success following the Brexit referendum.
Survey results from IHS Markit showed that the UK manufacturing
sector contracted unexpectedly in May, for the first time since
July 2016.
The headline IHS Markit/ Chartered Institute of Procurement
& Supply Purchasing Managers' Index declined more-than-expected
to 49.4 in May from 53.1 in April. The score was forecast to fall
moderately to 52.0.
The currency exhibited mixed trading against its major opponents
in the Asian session. While it fell against the yen and the franc,
it held steady against the euro. Against the greenback, it
rose.
The pound declined to 0.8871 against the euro, following a high
of 0.8825 seen at 4:00 am ET. Next key support for the pound is
seen around the 0.90 level.
Survey data from IHS Markit showed that Eurozone manufacturing
activity remained in contraction territory in May.
The factory PMI fell to 47.7 from 47.9 in April.
Having climbed to a 5-day high of 1.2660 at 4:00 am ET, the
pound reversed direction and retreated to 1.2610 versus the dollar.
If the pound drops further, 1.24 is possibly seen as its next
support level.
The U.K. currency depreciated to 1.2588 against the franc, its
weakest since January 15. The pound is seen testing support around
the 1.235 region.
The pound fell back to 136.64 against the yen, just few pips
short of a 5-month low of 136.62 touched at 12:45 am ET. Further
downtrend may take the pound to a support around the 135.00
level.
The latest survey from Nikkei showed that Japan manufacturing
sector fell into contraction in May, with a manufacturing PMI score
of 49.8.
That's down from 50.2 in April, and it slips beneath the
boom-or-bust line of 50 that separates expansion from
contraction.
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