GBP/USD drops further to 1-week lows, tests 1.3000

• Pound under pressure across the board on the back of latest Brexit headlines. 
• Cable hits lowest since last Friday, challenges 1.3000. 

The GBP/USD pair dropped further during the US session on the back of a stronger US Dollar across the board and also by the latest Brexit developments. 

US economic data released today showed that the economy added 196K jobs in March and a slower-than-expected wage growth gains. The numbers failed to lift the greenback, but after the beginning of the American session, the dollar gained strength across the board. The DXY turned positive, and it is up 0.10% for the day even despite lower US yields and NFP. 

Regarding Brexit, the latest comments from European leaders weigh on the pound. Dutch PM Rutte said that UK PM May’s letter was not enough to allow another extension while recently Germany’s foreign minister Maas mentioned that there were many questions that London needs to clarify. 

Cable printed a fresh 1-week low at 1.3003 and continues to trade near the lows, under pressure. A break below 1.3000 would expose last week lows at 1.2975. If it drops below the mentioned level it would be trading at the weakest since early March. 

Week ahead 

In the US, the economic calendar shows as key events CPI data and the FOMC minutes. Traders will also look for US-China trade talks headlines. 

Economic data from the UK is likely to be offset by Brexit development. “It’s crunch time again with the UK scheduled to leave the EU on April 12th unless another extension can be agreed. After beginning talks with the Opposition, PM May this week proposed an extension to June 30th, while the EU prefers a longer “flextension”—perhaps up to a year. Any new deadline will have to be approved at an emergency European Council summit on Wednesday. If an extension can’t be agreed, risk assets are likely to take a hit—while sterling would suffer most”, wrote RBC analysts.