The Bank of England's decision last week to leave interest rates unchanged at 0.25% and the potential for Parliament to vote on Brexit, which could effectively overturn last summer's referendum to leave the European Union, has propped up the pound sterling against other G7 currencies.
On November 3, the U.K. High Court ruled that Parliament must approve the decision to leave the European Union before Brexit can begin in earnest, following Prime Minister Theresa May's announcement that Article 50 would be invoked, triggering a "hard Brexit," where the U.K. would leave in a Big Bang at the end of March 2017. The May government is expected to appeal the High Court's ruling.
December futures opened at 1.2403 on the CME Globex, hitting a high of 1.2448 and a low of 1.2388 by mid-morning. June 2017 futures--three months from a hard Brexit, opened at 1,2454m above the December 2016 contracts.
"Those hoping to see the pound continue to climb--and it's worth noting that the currency has held onto its gains from last week--will be hoping for further positive news surrounding the UK economy and a potential 'Soft Brexit,'" said Joseph Wright of Pound Sterling Forecast.
Wright expects there to be movement within sterling exchange rates when the outcome of the government's appeal against the High Court's decision last week is announced. If the appeal is unsuccessful, Wright said, "I expect to see the pound rally once again."
If the government is successful in the appeal, the will likely pound decline.
Last week the pound had its best showing against the Greenback since the out years of the financial crisis, with October 2009 being the high water mark. The U.K. Office for National Statistics reported Tuesday that manufacturing production, which measures the total value of output by manufactures adjusted for inflation, was up 0.6% in September, beating expectation by 0.4%.