Pound Weighed by Growing Brexit Concerns
The Pound Sterling remained mired at a 10-week trough during Tuesday trade as worries over the Brexit withdrawal from the European Union overshadowed other events. Specifically, Philip Hammond, the UK's Finance Minister touted the end of the UK's lengthy austerity period which many traders had anxiously been awaiting. However, concerns over a still possible hard Brexit have surpassed any positive sentiment for a less austere economic environment. The Brexit has pushed all other events to the sidelines, and as a result, the Pound has lost about 4% against the greenback just since September.
As reported at 11:36 am (BST) in London, the GBP/USD was trading lower at $1.28, down 0.32%; the pair has ranged from a low of $1.2754 to a peak of $1.2813 in today's session. The EUR/GBP is trading at 0/89032 Pence, a gain of 0.20%; the pair had hit a peak of 0.89111 Pence while the low was recorded at 0.88832 Pence.
FX Traders Take “Wait-and-See” Stance
One FX strategist in Frankfurt puts the situation into perspective; she says that FX traders are surely excited about the prospect for higher spending in the UK, as the Finance Minister Hammond had touted. But she said, realistically, there is great anxiety over whether that will come to fruition given Britain's impending departure from the EU and the absence (with only five months to go) of an agreement. She said traders are at the point where they would need to see it to believe it.