Brexit Uncertainty Still Dominates
Though there may have been some relief that the Brexit has been postponed until October 31st, it wasn't apparent among FX traders who allowed the Pound Sterling to stall in Thursday trade. The GBP/USD is once again range-bound, and analysts blame the enduring uncertainty of the future as the reason for tamping down enthusiasm. Currency strategists say that there is some immediate advantages for Sterling, now that the risk of the impending crash out of the trading bloc without a deal has been removed. The longer terms risks are largely geopolitical, i.e. the removal and replacement of the Prime Minister and the likelihood of a general election would all reflect on the currency.
As reported at 10:55 am (GMT) in London, the GBP/USD was trading higher at $1.309, a gain of 0.413%;; the pair has ranged from a peak of $1.3109 to a trough of $1.3085. The EUR/GBP was trading at 0.8615 Pence, up 0.0081%; the low end of today's band was recorded at 0.86050 Pence while the peak was recorded at 0.86349 Pence.
Eurozone Economic Outlook Murky
Yesterday, the European Central Bank announced it would leave interest rates at current levels, largely as experts had anticipated. They also hinted at the prospects of maintaining the low rate environment until global growth improved and trade issues have been resolved. In his speech after the policy announcement, Mario Draghi highlighted the many risks that are facing the collective economies of the Eurozone, and expressed concern that the area could slip into a recession without appropriate stimulus. That suggested to some that the ECB might become even more dovish in the future. The EUR/USD was trading higher at $1.1278, a gain of 0.0373%.