Sterling remained near two-week lows yesterday against the US dollar as investors are prepared to listen to the Government and the Bank of England’s take on how a no-deal Brexit would affect the UK economy. With only 4 months to go before the UK separates itself from the EU, Theresa May has failed to garner much support from parliament for the agreement she sealed on the weekend and sterling has reflected this uncertainty. The possibility of MP’s preventing the deal from passing, sent cable to a low of 1.2735 on Tuesday and kept GBPEUR from moving beyond 1.13. The greenback was also supported by investors looking ahead to a speech from Fed Chair Powell, scheduled for later today. The dollar has been under scrutiny in recent weeks on signs that the central bank may slow the pace of monetary tightening amid slowing global growth and escalating trade tensions. The Fed’s view on the current economic slowdown will be a key talking point later on along with how Jerome Powell addresses the criticism from President Trump on the policies the Fed is implementing. It’s unlikely the central bank will take much notice of Mr Trump’s view however, with the Fed’s independence something it won’t be giving up.
The data calendar is busier today with releases from the US and the UK drawing attention. The first announcement of note will be preliminary GDP numbers from the States at 13:30, where a marginal increase from the previous reading is forecast. Crude oil inventories will then be updated at 15:30 before attention flies back to Britain for bank stress test results and the Bank of England’s financial stability report at 16:30. Governor of the Bank of England, Mark Carney, will then speak 15 minutes later before Fed Chair Powell does the same at 17:00.