The Pound Sterling hit an 11-day trough against the common currency Euro as markets awaited a speech from the head of the Bank of England, Mark Carney. Yesterday, market players were disturbed by the comments of an incoming BoE policymaker who essentially said that impact that the Brexit could cause on the UK economy warranted a cautious stance. The latest report from the BoE, the Financial Stability Report, issued what some analysts say were dire warnings that the underlying foundation for the UK economy, specifically, the derivatives which support it, could be at risk if the EU doesn't come up with an implementation plan for the March 2019 Brexit.
As reported at 11:26 am (BST) in London, the EUR/GBP was trading at 0.88079 Pence, a gain of 0.02%; the pair earlier hit a session peak of 0.88300 Pence while the low is at 0.88061 Pence. The GBP/USD was trading at $1.3218, down 0.04%; the pair has ranged from a session trough of $1.3189 to a peak of $1.3234.
Dissent from BoE Members Weigh
What markets hope to hear from Mark Carney is any hint as to the probability of a 2018 rate increase. Markets have been uncertain of a policy shift given the contrasting viewpoints of the BoE members with voting rights, some of whom don't believe the UK economy is strong enough to warrant a rate hike. Yesterday, John Haskel, who will join the BoE's Monetary Policy Committee in August, spoke of too much slack in the UK labor market which spooked FX traders.