The British pound started the first full trading day of 2017 on a back foot and found itself tracking the red territory on Tuesday as pressure from latest manufacturing data, the resignation of a UK-Ambassador and the strength in dollar hurt the currency.
The GBP-USD hit a two month low yesterday and remained below the 1.23 level and is seen to continue losing strength and could fall as low as 1.21 in the first week of 2017.
This early struggle can be accounted from a series of events in the local and international market.
A robust manufacturing data in London was recorded in December, viewed as a result of the country’s controversial divorce with the European Union last June. The recent economic figures showed that the index has jumped to 56.1 last month, the highest level for 30 months, boosted by the strong overseas and domestic demand.
The British pound further lost its strength against the greenback in the wake of resignation of UK’s Senior Ambassador to the European bloc despite the Brexit procedure being process. Sir Ivan Rogers was reportedly stepped down on his positons on Tuesday.
Meanwhile, dollar’s continuous rally was also a major contributor to the sterling’s early struggle as it touched another record high against its major rivals. The greenback closed up at 103.820, its highest level since December 2002.
Worries continued to pile up on the British pound as uncertainties kept hounding the currency after Britain’s vote to leave the continental bloc.