So-called risk reversals have risen this week to their highest levels since March 2017, indicating demand for puts has risen versus calls, according to option market pricing for three, six and nine-month periods.
The Bank of England policymakers were also upbeat on the United Kingdom economy while saying the growth is expected to remain modest by historical standards, but higher compared to the beginning of this year. At the time of writing on Thursday afternoon, GBP/EUR trended in the region of 1.1120.
He believes that a no-deal Brexit is now more likely than an agreed withdrawal, putting the odds at "60-40".More news: Spain’s Gerard Pique retires from global football
With the no-deal Brexit scenario becoming the official strategy, the GBP/USD is likely to be exposed to further selling pressure as it is trapped in the downward sloping channel.
Clearly some market participants have one eye on upcoming United Kingdom data while assessing the damage of a potential no-deal Brexit outcome on the United Kingdom economy.More news: Richarlison strikes twice but 10-man Everton held at Wolves
Although Ian McCafferty is an external Monetary Policy Committee member who is leaving the MPC at the end of this August, his hawkish views are well known as he was voting for a rate hike since March until the Bank of England raised the Bank rate to 0.75 percent last week delivering dovish monetary policy outlook. EUR Pressured Slightly by European Central Bank's Cautious Comments The Pound was able to more easily rebound from its cheapest levels versus the Euro, due to some fresh comments from the European Central Bank (ECB) which were perceived as cautious.
The early estimates of the UK GDP from the National Institue of Economic and Social Research (NIESR) has recently announced that their GDP Tracker was pointing to a growth of 0.4%t in the second quarter of 2018 and 0.5% in the third quarter this year.
The falls come despite a rise in United Kingdom interest rates, which usually pushes up the value of sterling. Both year-over-year industrial and manufacturing production accelerated in June.More news: Day, Scott in mix at PGA as play suspended
While most of the blame for the pound's tumble has been put squarely on fears of the United Kingdom crashing out of the European Union without a deal, analysts have been keen to point out that August has always been a hard month for the currency.