The Pound Sterling hit a 1-week peak against the Euro after a brief rally which occurred after an official of the Bank of England commented on the outlook for monetary policy changes, specifically as they relate to interest rate hikes. Gertjan Vlieghe of the Bank of England told members of the British Parliament that, over the next three years, interest rates could rise between 25 and 50 basis points annually. Analysts point out that FX traders should be wary that, despite the commentary, incoming data will be driving the policy outlook.

As reported at 11:09 am (BST) in London, the EUR/GBP was trading at 0.8776 Pence, down 0.04%; the pair earlier hit a session trough of 0.87583 Pence while the peak is at 0.87900 Pence. The GBP/USD was trading at $1.3471, a gain of 0.28%; the pair has ranged from a session low of $1.3413 while the peak is at $1.3492.

Brexit and Data Weigh on Pound

Gains for the Pound's rise were capped ahead of key data due out in the coming days. Inflation data is due out tomorrow (both personal and producer) while the UK's economic growth as measured by GDP is due out on Friday. What is still a hot button for investors is the ongoing Brexit negotiations. Analysts are concerned that the deadlock over the Brexit could result in a snap election in autumn wherein the Conservative Party and the Prime Minister might face an uphill battle.