Today, the GBP/USD pair fell 0.2% to $1.2833, after rising 0.6% on Monday.
As Brexit party leader Nigel Faraj warned, Conservatives should not count on any additional compromises from his party.
This put pressure on GBP/USD, sending the pair to daily lows around 1.2825.
Recall that yesterday N. Faraj caused the pound to grow, saying that his party would not dispute the 317 seats of Conservatives in Parliament and decided not to nominate its candidates in those districts where the Tories won in the last election.
According to the leader of the Brexit party, such competition will only undermine the position of supporters of the United Kingdom's exit from the European Union and play into the hands of their opponents. In addition, the victory of the Labour Party will increase the likelihood of a second referendum in the country. Accordingly, instead of competing with the Tories, the Brexit party will prefer the struggle for places with other rivals.
This increases the chances of Conservatives to get the majority of seats in the British Parliament and, therefore, to conclude a deal with the EU on the terms that London and Brussels agreed last month.
At the moment, the market is fixated on early December 12 elections in the UK and ignores most of the other events, and the pound's volatility is growing as opinion polls about how the voters vote.
According to recent polls, the Tories are gaining 39% of the vote, and the Labour Party is still 31%.
At the same time, new data reflect the negative impact of Brexit on the economy of the United Kingdom, which almost stepped into a recession.
According to the Office of National Statistics (ONS), the country's GDP expanded by only 1% in the third quarter compared to the previous year, demonstrating the lowest growth rates since early 2010.
The information released today showed that the British economy lost some jobs in the third quarter, and the number of vacancies was the largest in the year after the global financial crisis.
The upcoming elections in the UK Parliament are the third in four years, and they mean another attempt to break the impasse that the Brexit process has again entered and which has greatly affected business and investment activity in the country.
However, the election result is far from clear, and some economists and analysts fear that voting will only plunge the country's political system into the depths of chaos, while increasing uncertainty about the future development of the British economy and trade.
"Regardless of how the Brexit issue is resolved, the economic and financial power of the United Kingdom is likely to be weakened and more susceptible to economic shocks than previously thought," said Moody's rating agency.
The material has been provided by InstaForex Company - www.instaforex.com