FX round-up: Sterling mixed as risk-averse investors head for safe-havens

Brexit-ravaged sterling turned in a mixed performance on key pairs Wednesday as risk-shy investors headed for gold and other safe-haven assets amid UK, Europe and US political unease.

At about 17:10 GMT, sterling was up 0.26% to $1.2542, and up 0.07% to €1.1718. The dollar-spot index was down 0.15% to $100.110.

Sterling fell against the dollars of Australia and New Zealand, the latter's central bank due to issue its latest interest rate decision.

The British unit also fell versus South Africa's rand and Japan's yen.

Michael Hewson, chief market analyst at CMC Markets UK, said the pound's rebound back above $1.2500 came after Tuesday's rather hawkish intervention by MPC member Kristin Forbes.

"While selling the pound has become a favourite past time for currency traders in recent months, there are signs that it could be a trade that has run its course," Hewson opined.

With no significant domestic data out Wednesday, the progression of UK Prime Minister Theresa May's Brexit bill towards scrutiny from the House of Lords later this month was in focus.

Sterling tanked in late June after UK voted to quit the European Union, and has not come close to recovering those lamentable losses. Jitters centre on what type of Brexit deal UK might achieve -- whether 'soft,' 'hard' or 'middling' -- if any at all.

The euro's fortunes were also under the spotlight on both sides of the Atlantic.

HL Currency Service senior analyst Chris Saint noted sterling's 24-hour rebound against the euro, this apparently petering out around €1.1750 earlier.

SpreadEx financial analyst Connor Campbell noted the impact on the euro of fears about a potential Marine Le Pen presidency in France, and the re-mounting debt crisis in Greece.

These had helped "feed into the losses the currency saw after (ECB President) Mario Draghi’s address on Monday," he said in a statement.

Meantime, the greenback was mostly lower, falling against the euro, loonie, kiwi, saffa and yen, but making modest in-roads against the aussie.

"The US dollar has come under pressure again today with the Japanese yen once again performing well on safe-haven flows," observed Hewson.

IG market analyst Joshua Mahony said the out-performance of gold -- alongside bond yields and the yen -- highlighted worries that were rumbling on beneath global markets.

"Despite the possibility of stock market gains, driven by a weakening pound and the expectation of a (US President Donald) Trump fuelled stimulus package, there remains a whole host of political risks within the globe at present which provides the perfect basis for a continued rise for gold," said Mahony.

"Gold has managed to hit a near three-month high this morning, with the flight to safety continuing apace once more."