It has been another positive week for Sterling following events from Central Banks and Brexit news. We saw GBPUSD above 1.25 and GBPEUR above 1.13 after the Fed announced their interest rate cut and the probability for more, and potential QE- This alongside Junkers comments about the willingness for a Brexit Deal gave a nice boost to Sterling through the end of the week. The Pound has been the best performing currency this month, let alone the week.
Traders will now be looking at news from the UK & Brussels to dictate where Sterling goes next as we move into October, generally, the Pound is on an uptrend at the moment- however, whether the UK will be able to make a deal and get it approved by Parliament by October 31st still looks like a long shot.
The Pound still has legs to move further up, however as the Pound will be sensitive to any news coming out- it is likely that we will see sharp moves in both directions as we receive headlines in regards to the Brexit deal. The reality is that traders do not deem it likely that the UK will leave October 31st, and that the scenario of an extension into January with a General Election seems to be the way forward here.
It is because of the above that I feel that though we may see some strength in the Pound short term- we may not see the long term drive back up yet as there is still a lot of volatility on the cards ahead for the UK- so it is worth looking at the current levels and taking advantage whenever they work for you.