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Pound Dips As U.K. PM Plans To Suspend Parliament Before Brexit


The pound was defensive against its key counterparts in the European session on Wednesday, as U.K. Prime Minister Boris Johnson announced plans to suspend Parliament from mid-September to force through Brexit with or without a deal.

Johnson wrote a letter to MPs confirming that he has asked the Queen to suspend Parliament from September until mid-October.

The Prime Minister said a new session of Parliament would then commence with a Queen's speech on October 14.

MPs will return from their summer recess on September 3 and will sit only around September 12.

Johnson's move came a day after opposition parties agreed to pass legislation in order to block a no-deal Brexit on October 31.

If Parliament is suspended as per Johnson's plan, opposition MPs are unlikely to get time to approve any legislation that would thwart crashing out of the European Union without a deal.

Survey data from the Recruitment & Employment Confederation showed that British employers' confidence remained low but they plan to hire additional staff. The employers' confidence index fell 1 percentage point to a net -26 in May to July period.

Data from the British Retail Consortium showed that UK shop prices continued to fall in August on weak consumer spending and stiff competition. The shop price index dropped 0.4 percent year-on-year in August as non-food prices plunged 1.5 percent.

The currency has been trading modestly lower against its major opponents in the Asian session, with the exception of the euro.

The pound lost almost 1.1 percent to a 6-day low of 1.2154 against the greenback, after climbing to 1.2290 at 5:00 pm ET. The pair was worth 1.2288 when it closed deals on Tuesday. Next immediate downside target for the pound is seen around the 1.19 area.

The U.K. currency shed 1.1 percent against the yen, touching a 2-day low of 128.47. The pair had closed Tuesday's deals at 129.93. Should the pound decline again, 125.5 is possibly seen as its next support level.

The pound was 1.1 percent weaker at a 2-day low of 1.1933 against the franc, after touching a high of 1.2068 at 3:15 am ET. The pound was trading at 1.2058 against the franc at yesterday's close. Further downward trading may take the pound to a support around the 1.17 level.

Pulling back from a high of 0.9019 seen at 5:00 pm ET, the pound declined 1.2 percent to a 6-day low of 0.9123 against the euro. At Tuesday's close, the pair was valued at 0.9021. The pound could see support around the 0.92 level.

Data from the Federal Statistical Office showed that Germany's import prices declined for a third straight month in July. They declined 2.1 percent year-on-year in July following a 2.0 percent decrease in June. Economists had expected a 2.0 percent fall.

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