The uncertainty surround GBP continues, although 9th November 2018 saw an GBP/EUR increase of €1.150. The increase comes as Brexit Secretary instilled confidence following a Brexit cabinet meeting at 10 Downing Street.
Discussions within the meeting included the omittance of proposed Irish backstops within a few months’ notice. This gave many confidences that Brexit talks where heading in the right direction.
Despite some of the positives being highlighted, there is still disappointing data in the guise of poor UK housing data, according to data from Parsons.
Other data garnered showed that growth in the United Kingdom during the third quarter was the fastest growth since the fourth quarter of 2016.
Although this proves to be positive, there is some negativity thrown into the proceedings. Business investments have dropped for a third quarter, while projections for quarter four hint that a slowdown in gross domestic product could contribute towards a slowdown.
Although there is positivity in some channels, there is still a lot that is holding GBP back when it comes to making gains in the market.
More Positive Outlook in Relation to Labour Market Report
Despite some of the negativity surrounding GBP, the UK labour market seems to be more positive. The Bank of England has recently updated its view on wages given the current pressures put in place by inflation.
As is often the case, the pendulum normally swings in the favour of news updates, so new data or talks could cause adversity and positively in the future.
UK Banks Have Positive View on GBP
On 8th November 2018, Lloyds Bank showed their faith in GBP, advising the currency could see further gains against EUR and USD, albeit with some analysing. However, this has been the case if GBP overall during the Brexit talks, so a robust performance while celebrated, is often short-lived.
However, as talks progress in the right direction in relation to Brexit, it does signal why some financial institutions are showing confidence in GBP.
US Federal Reserve Interest Hikes Also Attributed
As well as the Brexit uncertainty and the financial pressures currently being witnessed by the UK, the GBP has also suffered from the strengthening on the Dollar in the pairing.
Azad Zangana has stated that in the short-term, the economy will do little catching up, as the reality of Brexit begins to hit home.
Although recent talks have injected confidence, there is still a lot to be discussed to determine what exactly will happen following Brexit, with many taking less chances until a final decision is made.
Much of the fluctuation of GBP centres on updates which are being released more and more often, meaning the value of Pound sterling could bring both bad and good news for investors.