Pound Reverses Gains after Rumor Denials
The Pound Sterling surged briefly during Tuesday trade in London but gave back most of its gains when it was learned that the news which had prompted the rally was disavowed by the German government. A BBC report claimed that Germany had expressed willingness to put a time limit of five years on the backstop issue at the Irish border, the “sticking point” for negotiations in the British Parliament. However, shortly after the report, Germany denied the claims, sending Sterling lower once again.
As reported at 10:59 am (GMT) in London, the GBP/USD was trading at $1.3089, a gain of 0.2366%: the pair has ranged from a trough of $1.3057 to a peak of $1.3122. The EUR/GBP was lower at 0.8616 Pence, down 0.0742% and well off the session peak of 0.86258 Pence.
While the Brexit noise continues to dominate sentiment, Sterling traders will turn their attention to tomorrow's release of a slew of economic data for the UK. The Office of National Statistics is poised to release February figures for Industrial and Manufacturing Production as well as trade balance figures. Overall, economists are expecting to see a significant decline in the month-over-month production figures. The February GDP figures will also be released, with expectations of slowed growth to 0.0% in February (month-over-month) against a previous reading of 0.5%.