It seems that the problems in the pound are just beginning, and after all, quite recently, the prospect of further growth with the updating of important resistance levels was really feasible.
Today's pound collapse of more than 1.5% at one moment was triggered by news that two ministers headed by Theresa May, the British government resigned. The resignation was announced due to disagreements on the Brexit plan, which was recently introduced by the British prime ministers. The resignation of two ministers at once threatens the stability of the Conservative Party's cabinet.
We are talking about the resignation of the Minister for Brexit Dominic Raab, as well as the Minister of Labor and Pension Esther McVey. Their withdrawal from their positions also threatens the exit plan from the EU. If other ministers suddenly follow them, and this possibility is not excluded, it will lead to the risk of Theresa May's removal from her post.
Let me remind you that the Democratic Unionist Party of Northern Ireland, which provided May with a majority in passing many laws, said yesterday that she would vote against the Brexit plan.
Immediately thereafter, the British Prime Minister Theresa May made a statement that the EU offers a more ambitious trade agreement than agreements with other countries, emphasizing that other countries enjoy more benefits than the British Union offers the European Union. May was also upset by the fact that there is currently no alternative agreement allowing the British to get what they voted for in 2016.
In her opinion, in order to comply with national interests, it is necessary to make the right decisions, not simple ones, and if the vote is against the agreement, then everything will return to the starting point. British Prime Minister also assured that the government continues to prepare for the case of withdrawal without an agreement.
Data on retail sales in the UK only intensified the fall of the British pound. Lack of consumer willingness to spend money could jeopardize the UK's projected growth rate in the 4th quarter of this year.
According to a report by the National Bureau of Statistics of the United Kingdom, retail sales in October 2018 fell immediately by 0.5% compared with September. The fall was directly related to the decline in sales of clothing and household items.
The data released on the American economy in the second half of the day did not greatly affect the EUR / USD pair, which continues to be traded in the side channel.
According to a report by the US Department of Commerce, the number of initial claims for unemployment benefits rose by 2,000 in the week from November 4 to 10, to 216,000. Economists had expected that the number of applications would be 215,000.
Import prices rose in October of this year, which keeps the general rate of inflation in the United States at the right level. According to the US Department of Labor, the prices of imported goods in the United States in October this year rose by 0.5% compared with the previous month, while economists had expected their growth by 0.2%.
As noted in the report, the main growth was due to oil prices, which in October rose by 2.8% compared with the previous month. Compared with October 2017, import prices increased by 3.5%.
The material has been provided by InstaForex Company - www.instaforex.com