Two key pieces of uncertainty are keeping Pound Sterling traders sitting on the sidelines as they wait the outcome. First, the decision from European Union leadership is eagerly awaited for their decision to allow another Brexit extension through to end of January 2020. Analysts are generally in agreement that the EU will agree to the request. The second piece is the vote which will decide on whether or not to have an early general election in the UK Parliament. The outcome here is more unlikely according to some strategists, as two thirds of Parliament have to agree and Boris Johnson is not seen having the backing for it.
At 11:10 am, in London, the GBP/USD was trading at $1.2841, up 0.0811% and off the earlier trough of $1.28051. The EUR/GBP is higher at 0.8637 Pence, a gain of 0.0521%; the pair is ranging from a low of 0.86248 Pence to 0.86547 Pence. The GBP/JPY is trading at 139.549 Yen, a gain of 0.0918%.
Focus Shifts to Central Banks
Markets' attention this week will be drawn to the central banks. Beginning later today with a speech from outgoing chief of the European Central Bank, Mario Draghi, the focus will then shift to a speech from the governor of the Reserve Bank of Australia, Philip Lowe. On Wednesday, the Bank of Canada, US Federal Reserve Bank and bank of Japan will all be making policy decisions. Analysts are predicting no change to the BoC or BoJ rate structures, while the Fed is likely to push through a 25 basis points reduction. The Chairman of the Swiss National Bank is due to speak on Thursday.