Pound Higher but Brexit Worries Remain

The Pound Sterling edged higher but remains within striking distance of the recently struck 2-month trough as FX players await the annual budget speech from the British Finance Minister. Analysts believe that Philip Hammond will take the opportunity to encourage support for Theresa May's Brexit plan in order to ensure that the UK economy is able to withstand the easing of austerity restrictions. Hammond will say that the move toward higher spending, a welcome sight after years of public service reductions, will only come with assurances that a Brexit agreement is reached.

As reported at 11:41 am (BST) in London, the GBP/USD was trading at $1.2837, a gain of 0.06%; the pair has ranged from a low of $1.2806 to $1.2843. The EUR/GBP is trading at 0.88862 Pence, down 0.03%; the pair moved off the session low of 0.88695 Pence while the high for the trading day was recorded at 0.89000 Pence.

BoE Decision Ahead

Ahead for Sterling traders, markets will focus on Thursday's monetary policy decision from the Bank of England. Analysts say that, in the absence of the Brexit issue, the BoE's Monetary Policy Committee would likely be providing an outlook which could include an early 2019 rate increase, just ahead of the official Brexit withdrawal. Given the uncertainty of the issue, however, market players are more wary which is now being reflection in the Sterling options market

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.