Pound Higher but FX Traders Wary
The Pound Sterling edged higher in London trading, regrouping after last week's losses. Mixed economic news, including some improvement in GDP, may have helped push the Pound higher, though analysts confirm reaction remains muted. The Office of National Statistics in the UK reported that 2nd quarter GDP improved to 1.3% on an annualized basis, slightly better than had been predicted at 1.2%. On a quarterly basis, however, and with more economic relevance, GDP remained flat at -0.2%. Total business investment, though still a negative, was at least not as bad as the analysts had predicted.
At 11:31 am in London, the GBP/USD pair was trading at $1.2309, a gain of 0.1725% and off the session peak of $1.23313. The EUR/GBP is lower at 0.8875 Pence, a loss of 0.3033%; the pair has ranged from 0.88659 Pence to 0.89097 Pence in today's trade.
Pound Outlook Remains Bleak
The overall sentiment for the Pound remains wary, however, given the uncertainty over the future of the Brexit. Lack of progress in negotiations berween the UK and the EU, as well as the disharmony in the UK Parliament, have forced FX traders to hold onto their pessimism. Coupled with comments from the Bank of England that the Brexit concerns could result in a prolonged period of loose policy, the Pound will struggle for traction says currency strategists.