British pound sterling recovers against the U.S. dollar

British Pound

Monday, the British pound sterling recovered some if its losses against the United States dollar after slipping for at least three continuous weeks, however these strong gains were monitored by persistent uncertainty regarding Brexit talks, as well as the uncertainty in Theresa May’s Conservative party.

The British pound sterling was seen edging up against the United States dollar, settling at $1.3120 which was 0.3% higher from their previous close. In addition, the pound also edged up against the single currency of about half a percent and settled at 88.30 pence against the euro.

In accordance to the continuous uncertainty regarding Brexit talks, investors are checking the negotiations around Britain’s future relationship with the European Union for the effects on business confidence and economic growth, as well as on the possibility of further interest rate hikes brought by the BoE or the Bank of England who decided to raise rates last week.

In addition, Mark Carney, Bank of England’s Governor mentioned on Thursday that the BoE pans two further rate hikes in the next three years, although the outcome of the Brexit talks still remains as a factor in shaping the future of Britain’s interest rate policy. In which, Craig Erlam, market analyst at forex trading firm: OANDA, said that all of the Bank of England’s assumptions right now are based on a smooth and transitional Brexit, and that there is the likelihood of facing hindrances that would be negative for the British pound, which might suggest that those anticipated rate hikes mentioned by the BoE may not occur.

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