Pound Falls Ahead Of Two Crucial Brexit Votes

The pound declined against its most major counterparts in the European session on Tuesday, as the U.K. parliament is set to debate and vote on Johnson’s Brexit deal, after being denied twice.

Lawmakers will vote on Johnson’s so-called Withdrawal Agreement Bill and then on the government’s tight timetable for approving the legislation.

Speaking to the European Parliament in Strasbourg, European Council President Donald Tusk told that he would decide on the UK’s request for a Brexit delay in the coming days.

Data from the Office for National Statistics showed that the U.K. budget deficit for September increased for the first time in five years.

Public sector net borrowing excluding banks increased by GBP 0.6 billion from last year to GBP 9.4 billion in September. This was the first September year-on-year increase for five years.

Borrowing in the current financial year-to-date was GBP 40.3 billion, which was GBP 7.2 billion more than in the same period last year.

Survey results from the Confederation of British Industry showed that UK manufacturing output continued its downturn in three months to October reflecting sharp decline in the auto sector.

According to the Industrial Trends survey, the balance of output volume decreased to -10 percent from +1 percent in September.

The pound fell to 140.21 against the yen, from a high of 141.11 hit at 9:15 pm ET. If the pound falls further, 139.5 is seen as its next support level.

After rising to 1.2987 against the greenback at 11:00 pm ET, the pound reversed direction, reaching as low as 1.2922. The pound is seen finding support around the 1.28 level.

The pound reversed from an early high of 0.8587 against the euro, falling to 0.8620. Next key support for the pound is seen around the 0.88 level.

In contrast, the pound bounced off to a 5-day high of 1.2824 against the franc, from a low of 1.2761 seen at 3:30 am ET. The pound may possibly face resistance around the 1.31 level.

Looking ahead, Canada retail sales for August and U.S. existing home sales for September will be featured in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com