The Pound Sterling steadied on Thursday after the US Federal Reserve indicated a likely rate hike by year’s end. The Fed kept interest rates at their currently levels though it did indicate it would begin to reduce its balance sheet next month. Yesterday, the Pound struck a high not seen since the June 23rd 2016 Brexit vote which set the stage for Britain to leave the European Union. Up until the Fed statement, the Pound had been on an upswing, the momentum provided by the Bank of England’s comments that it was preparing for a rate hike over the coming months.

As reported at 11:18 am (BST) in London, the GBP/USD was trading at $1.3486, down 0.04%; the pair has ranged from a session trough of $1.3471 to a peak of $1.3515. The EUR/GBP is up 0.24% and trading at 0.8828 Pence, moving off the earlier peak of 0.88341 Pence while the session low stands at 0.87960 Pence.

Analysts say that though higher UK rates support an appreciating Pound Sterling, there are still risks. That is what has made FX traders wary of Theresa May’s upcoming speech on Friday in Italy. May could expand on what she believes will be Britain’s future relationship to the EU. If she appears to be pushing for a “hard Brexit” that is likely to weigh on the Pound; in a “hard Brexit” Britain would not receive preferential access to the EU market.