Sterling briefly dropped to a 17-month low on Tuesday following further Brexit-related headlines. The pound fell sharply after Prime Minister Theresa May’s government was found in contempt of parliament for refusing to release its full legal advice on Brexit, underlining the depth of opposition among lawmakers to her deal on leaving the European Union. There was a small rebound however after the government lost a further vote in parliament that could reduce the likelihood of Britain leaving the EU without any deal.
This morning saw lows of 1.1196 against the Euro and 1.2674 against the US Dollar. However, Sterling recouped much of its overnight losses, gaining a little over half a cent against the single currency and a cent against the greenback towards midday as optimism grew that Britain may not leave the European Union without a deal in place.
On the data front, it has been a busy morning for the single currency with final PMI’s released. Italy, Spain and France came in ahead of forecast and Germany came in as predicted. From the UK, Services PMI saw a fall of 1.8 signalling a slow down in the market place towards the year end. This afternoon Canada will see the BOC rate statement, used to communicate with investors about monetary policy. This will also contain any decisions on changes to interest rates and commentary on economic conditions.