The Pound Sterling was broadly lower in Tuesday trading and remains under sell pressure as wary investors consider the terms of Britain’s departure from the EU. Adding to the pressure is the doubt over the Bank of England’s likely move to begin hiking the benchmark lending rates. Analysts say political risk continues to be the driving force for the Pound, which has lost nearly 17% in the almost 11 months since the Brexit vote. Earlier today, one Parliamentary committee required the Prime Minister to offer proof that a “bad deal” would be worse than no deal at all by providing a forecast as to how the Brexit will impact the UK economy.
As reported at 10:00 am (BST) in London, the GBP/USD was trading at $1.2459, down 0.20%; the pair earlier hit a trough of $1.2420 while the session high was at $1.2495. The EUR/GBP was trading at 0.8554 Pence, a gain of 0.09%, closer to the daily low of 0.8538 Pence than the high which was set at 0.8588 Pence. The GBP/JPY was lower at 137.6611 Yen, down 0.56% and approaching the session low at 137.2400 Yen.
Risk Appetite Higher as China/US Summit Looms
Risk appetite has generally been whetted across the board as investors fret over the impending meeting between Xi Jinping, the President of China, and Donald Trump, the US President. Though they haven’t officially had their first summit, Donald Trump and Xi Jinping have had a tense relationship, largely a factor of the rhetoric spewed by the Trump administration, especially as it relates to China’s trading tactics.