Sterling Reduces Its Biggest Monthly Losses Since Brexit

The Great Britain pound recovered from early losses on Monday against the euro and the US dollar to reduce some of the declines it recorded during October.

The British currency is heading toward its biggest monthly depreciation since June when voters in the UK chose to leave the European Union. Markets are speculating that the UK government might decide to head for a hard Brexit; a scenario in which the nation would give up its full access to the European single market in exchange for a full control over its borders and immigration laws. The political uncertainty is weighing down on the pound as traders closely follow new comments from lawmakers for more signals on the course the government will follow.

The interest rate decision from the Bank of England is due to be published on Thursday along with quarterly inflation report. However anticipation is building up for a possible statement from Mark Carney, the central bank’s governor, who may be announcing the remaining length of his stay in his current position.

GBP/USD rose to 1.2210 as of 19:10 GMT on Monday after dropping to 1.2148 at 16:40 GMT. EUR/GBP moved to 0.8976 as of 19:08 GMT after touching 0.9007 at 15:45 GMT. The pound is heading for a 6.3% monthly decline against the dollar in October, which would mark its biggest loss since June. The British currency has been going downhill since April 2016, recording losses for every month afterward.

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