The British Pound Sterling, on Wednesday, September 6, hit its highest in a month against the dollar on Wednesday, a day after its biggest rise in nearly two months, as investors trimmed some bearish bets before parliament discusses the European Union repeal bill.
The pound, helped by a weaker tone to both the dollar and euro globally, added another third of a percent in gains by late afternoon in London to trade as high as $1.3081.
It also gained 0.1 percent to 91.30 pence per euro, its strongest in more than two weeks.
Dealers said there were hopes that the bill debate may provide the basis for some clarity and progress in a Brexit process that has been cast as struggling to get past a handful of initial tests.
“Sterling is trying to get ambitious, in part simply on the negative focus on the dollar and the euro, as the latest UK data have been nothing to write home about,” said John Hardy, head of research at Saxo Bank.
“At some point, this Brexit uncertainty is becoming so intolerable that almost anything could be seen as providing clarity.”
Investors have doubled net speculative bets against the pound and in favour of the dollar in the past three weeks, bringing them to their highest since early May.
Analysts also wonder whether sterling’s slide against the euro, with some banks predicting parity within a year, will provoke more efforts by the Bank of England to talk the currency up.
“Sterling remains very headline-sensitive to politics but the protracted weakness in the currency may start to play a bigger role in central bank policy discussions,” said Viraj Patel, an FX strategist at ING in London.
Prime Minister Theresa May warned lawmakers over the weekend that Britain could be faced with a Brexit “cliff edge” if they failed to back the repeal bill, which will sever Britain’s ties with the bloc.
Finance minister Philip Hammond urged lawmakers on Monday not to seek to delay the legislation, which will copy existing EU legislation into domestic law, following reports that the opposition Labour Party is planning to propose several changes, Reuters reports.
