Markit's second purchasing managers' index for December wasn't better than the first one. Manufacturing PMI fell by 2 points in the last month of 2017 and the construction PMI also missed. It fell from 53.1 to 52.2 points, short of 53 predicted.

GBP/USD had already challenged the initial mid-September high of 1.3615 but it fell from there and now trades at 1.3580. Further support is at the early-December peak of 1.3550. All in all, it holds onto the high range it had reached yesterday but is unable to break to higher ground for now.

The unimpressive read for the construction sector isn't the only thing hurting the pound. The big issue remains Brexit. As the new year begins, analysts are assessing the prospects for the UK and the various scenarios that negotiations could bring. Given the tough stance by the European Union and the fragility of the UK government, the prospects are not that great.

Trade talks are set to start only in March, a year before the UK is out of the EU according to Article 50. Sure, there will be a transition period lasting until end-2020, but given the slow pace of negotiations between the EU and Canada or any other counterparty, it is hard to

The most recent rally in pound/dollar has been fuelled by the weakness of the greenback, not by any kind of Sterling strength. Once the dollar stabilizes, GBP/USD has a bit more room to the downside.