Brexit worries have overshadowed even the Bank of England's positive outlook and weighed heavily on the Pound Sterling. FX traders are growing increasingly concerned over the prospect of a “hard Brexit” when Britain leaves the EEU in just about eight months. At the heart of it is whether the Prime Minister will be able to carve out a favorable trade deal; earlier today, she spoke of plans to begin stockpiling blood products ad medicines which could be negatively impacted if no solid deal was forthcoming.
As reported at 11:07 am (BST) in London, the GBP/USD was trading at $1.3188, down 0.01% and off the session trough of $1.3175 while the peak for the day is at $1.3213. The EUR/GBP is trading at 0.88827 Pence, down 0.07%; the pair has ranged from 0.88761 Pence to a peak of 0.88956 Pence.
BoE Policy Outlook Questioned
The markets' expectations of a rate increase from the Bank of England has now improved to 81%, with analysts also predicting a 0.25% rate increase after next week's meeting. Though the consensus of economists polled is calling for a rate hike, one currency strategist cautions investors to be wary of a surprise which could put the Pound into “free fall.”