In Asian trade, FX traders' mounting concerns over a chaotic Brexit had earlier sent the Pound Sterling down against the greenback. While it has recovered currently, FX strategists say that the GBP/USD pair is still heading toward its worst weekly finish in two years. With a fixed deadline of December 2020, investors are not certain that the United Kingdom and the European union will be able to hammer out an equitable deal. Analysts say that ahead of the UK general election there was clearly some naivete that a win by the Conservative Party would dispel Brexit uncertainty. The growing uneasiness has once again helped to push safe haven assets higher, especially the Swiss Franc.
As of 11:21 am in Tokyo, the GBP/USD was trading at $1.3018, a gain of 0.0892% and moving off the session trough of $1.30033. The EUR/GBP is lower at 0.8538 Pence, a loss of 0.138%. The GBP/CHF was higher at 1.2738 Swiss Francs, up 0.1399.
No Surprises from BoE
In the UK, the Bank of England left its monetary policy unchanged, as expected; the benchmark interest rate remains at 0.75%. While there were no surprises as to the decision, the central bank is coming under fire for allowing a backup audio system to release embargoed information prior to the official release; this anomaly is now under investigation. Markets will focus their attention on the release later today of the UK GDP reading for the third quarter. The Office of National Statistics is expected to report that growth was stagnant at 0.3% in the third quarter on a quarter-over-quarter basis, and at 1% on a year-over-year basis. Any downside deviation in the actual figures could lead to a policy shift say some analysts, with a more dovish outlook a possibility.