It has not been easy for the Btirish currency lately. Britain's exit from the European Union is approaching, and the question of its "rigidity" or "softness" remains open. High probability of Brexit without a deal does not allow the pound to rise, analysts are certain.
The sterling fell to new lows against the US dollar on Tuesday, October 2. The GBP/USD pair is currently trading in the range of 1.2269–1.2277. Yesterday, the pair hit 0.5%, to 1.2225, the lowest since the beginning of September 2019.
The collapse of the sterling was largely due to reports of stringent rules regarding the border with Northern Ireland. Some time later, Brexit Minister James Duddridge noted that the news about the placement of customs posts 5-10 miles from the Irish border was misinterpreted by the opposition. Earlier, British Prime Minister Boris Johnson said that a number of customs checks on the island of Ireland would be required after the country's exit from the euro bloc. The politician is convinced of the need for such checks and does not believe that such measures will lead to the so-called "tight border".
This situation injures the pound. The internal border of the United Kingdom, ironically, is becoming a kind of rift that runs through the British currency. GBP/USD moved to its first close below the 55-day moving average (DMA) - near the level of 1.2278. According to analysts, another reason for the pound's recent fall below 1.2280 was because leading market players made large purchases of GBP/USD.
Analysts consider the high probability of the release of weak data on business activity in the UK industry as another negative factor for sterling. The reason for the possible deterioration of statistics was a noticeable reduction in factory orders in the country. Analysts are confident that this situation will force investors to again build up short positions in the British currency.
