With must traders sitting on the sidelines as the Christmas holiday approaches and the end of the year draws near, the Pound Sterling was mired close to a 4-month trough against the common currency Euro. Analysts say that the Pound is unlikely to make much headway ahead of possibly crucial developments on the Brexit next month. What is likely to happen is that the Prime Minister will attempt, once again, to gain the backing of her own party to push through her plans for the Brexit; if she cannot get her own team to back her, analysts say there is little hope that the Parliament as a whole will grant approval. Without a plan in place, the chances are greater that a hard Brexit is likely to occur.
As reported at 11:38 am (GMT) in London, the EUR/GBP was trading higher at 0.9013 Pence, a gain of 0.14%; the pair earlier struck a session peak of 0.90265 Pence, while the low was recorded at 0.89788 Pence. The GBP/USD was trading at $1.2646, up 0.12%; the pair has ranged from a peak of $1.2682 to a low of $1.2630 in today's trading session.
Brexit Outlook Still Uncertain
Currency strategists point out that the bounce in the Pound relative to the greenback is primarily a factor of a softer Dollar than a strengthening Pound. The Brexit will drive sentiment for the Pound until the Brexit takes place in late March. There is still some hope that a second referendum could be put forward to UK voters which might nullify the first and allow the UK to remain in the Euro area. What might also happen is that a snap election could see Theresa May ousted and replaced by her main rival, Jeremy Corbyn who has already said he would try to renegotiate the Brexit terms with Brussels.