The British pound fell sharply against the US dollar during the first half of the day after news came out that the EU leaders might reject the British Prime Minister Theresa May's request to postpone Brexit. Yesterday, the government sent a request to the EU to postpone the UK release date from March 29 to June 30. However, today there are reports in the media that the release date cannot be postponed to a date later than May 22.
Moreover, one of the EU's conditions is the Parliament's ratification of May's proposed agreement on Brexit, which has already been rejected twice by the House of Commons.
This news put serious pressure on the pound, since this option significantly increases the likelihood that the UK will withdraw from the EU on March 29 without an agreement.
Let me remind you that the summit in Brussels will begin today, where the leaders of the European Union will decide on the granting of the delay and its duration for two days.
As for the fundamental data that came out today on the UK economy, it did not have the desired effect and did not help the pound.
According to the report, UK retail sales increased in February, despite the events related to Brexit.
According to the National Bureau of Statistics, in February 2019, UK retail sales rose by 0.4% compared with January, after rising by 0.9% in January. Economists had expected retail sales to decline by 0.4% in February. Good retail sales are sure to support GDP growth after a weak completion in 2018.
Today, a report was also released in which it was stated that the net borrowings of the PSNB state sector amounted to £0.2 billion in February. The net borrowings of the UK public sector over the past 11 months at the end of March 2019 amounted to 23.1 billion pounds.
The Bank of England's decision to leave the key interest rate at 0.75% slightly supported the British pound. The decision was made with a vote ratio of 9-0.
The regulator said that it expects a smooth tightening of monetary policy in the event of an orderly exit of Great Britain from the EU, and that the outlook for the economy depends on it.
As for the technical picture of the GBPUSD pair, large levels of support are now visible in the areas of 1.3080 and 1.3030. In case of an upward correction on Brexit news, growth can be restrained by the resistances of 1.3225 and 1.3320.
The material has been provided by InstaForex Company - www.instaforex.com