While the British pound remains in the doldrums, today's economic data from the United Kingdom was surprisingly upbeat.
After an initial uptick to 1.2960 level, the GBP/USD pair met with some fresh supply and dropped to fresh eleven-month lows in the last hour. At the time of writing on Thursday afternoon, GBP/EUR trended in the region of 1.1120.
While there appeared to be no notable trigger to yesterday's pound sell-off, analysts suggest it is likely a result of growing anxiety that time is running for the United Kingdom to avoid a "no-deal" Brexit.
Unless there are optimistic Brexit developments in the coming days, or investors opt to sell the Indian Rupee from its recent highs, the Pound to Indian Rupee (GBP/INR) exchange rate is unlikely to recover for some time. The lack of clarity or certainty about whether the United Kingdom and European Union will be able to agree to a deal has dominated Pound movement.
The pound's weakness versus the euro "is a clear sign that markets are starting to focus on the pound-specific risks associated with a no-deal Brexit", said Viraj Patel, a currency strategist at ING Groep NV.
Still, analysts expect the Pound's recovery was limited and was due to rebound rather than any optimistic news.
While a slew of key United Kingdom ecostats will be published on Friday, concerns about the possibility of a "no deal" Brexit are likely to overshadow even optimistic results.
Last week, the Bank of England (BoE) raised interest rates above their crisis lows for the first time in almost a decade.
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.
This has largely been due to market concerns about the possibility of a US-sparked trade war lightening somewhat, and U.S. protectionist rhetoric with ally nations softening.
Brexit and a hesitant BoE continue to tie down the Pound as UK GDP numbers approach on Friday.
This would bolster Sterling support and could help GBP/EUR recover a little further, though Brexit uncertainties would likely put a lid on any potential recovery rally.
The falls come despite a rise in United Kingdom interest rates, which usually pushes up the value of sterling.
This would likely turn around some of the Pound's poor form, and a favourable uptick in the industrial production figures might also serve Sterling well against its major peers ahead of the weekend.