Optimism Offers Support to Pound
Before it retreated, investor optimism had helped to push the Pound Sterling to a 3½ month peak versus the Euro as the news media reported that a Brexit deal will likely be struck soon. One British news show reported late yesterday that both sides had moved forward in their negotiations over the Irish border, which had been a major stumbling block for the parties. FX strategists say that the news could also help the Pound against its higher risk rivals, especially the Aussie and Kiwi Dollars.
As reported at 11:17 am (BST) in London, the EUR/GBP was trading at 0.8739 Pence, down 0.05%; the pair had earlier hit a peak of 0.87500 while the trough for the session was recorded at 0.87234 Pence. The GBP/AUD was up AU$.18527, up 0.03% while the GBP/NZD was higher at NZ$2.0355, a gain of 0.32%.
UK Data is Reassuring
Key data has also played its part in helping the Pound find favor among FX traders. The UK's Office of National Statistics reported earlier that Industrial Production for August on a year-over-year basis was higher at 1.3%, above the 1.0% predicted, while the previous figure was adjusted higher. Manufacturing Production was also higher year-over-year, at 1.3% against forecasts of 1.2%, while the previous number was adjusted higher to 1.4% from 1.1%.