Currency strategists are wary of putting too much stock in the government's efforts to help the economy recover, given the headwinds of the Brexit negotiations.
The Pound Sterling traded close to a 3-week peak versus the US Dollar and moved higher on the Euro as FX traders await further details from the UK government on how they will provide additional support for the economy. Tomorrow, Rishi Sunak, the Chancellor of the Exchequer, will speak about the government's latest plans as to how £5 billion will be used for infrastructural investment. The government is said to be pondering the distribution of cash vouchers for British citizens with the hope that they will use the proceeds to uplift troubled sectors. Critics have said that they don't believe the voucher system will go far enough and are calling on Sunak to take on more aggressive tactics.
As of 10:52 am in London trading, the GBP/USD was trading lower at $1.2465, down 0.1946% and off the session trough of $1.24619 while the peak was recorded at $1.25188. The EUR/GBP was lower at 0.9039 Pence, down 0.1944%; the pair has ranged from a low of 0.90298 Pence to a high of 0.90636 Pence.
Outlook for Pound is Cautious
Currency strategists are wary of putting too much stock in the government's efforts to help the economy recover, given the headwinds of the Brexit negotiations. Without an agreement in place to ensure a smooth trade at the borders, the currency will continue to come under heavy pressure. Analysts say that the next few weeks will be crucial for the Pound and that the wariness is evident from the GBP/USD struggle to breach the $1.25 level over the last few sessions.