The pound continued its advances into Friday after reports that Northern Ireland’s Democratic Unionist Party who support Theresa May’s Conservative government could support the proposed Brexit deal, on certain conditions, in the preliminary vote next Tuesday. The House of Commons will vote next Tuesday on alternative Brexit plans after rejecting the deal May negotiated with the European Union. We can expect volatility in the pound in the build up to the vote with headlines dictating market movements.

The latest headlines sent the pound soaring to 1.1601 against the euro and 1.3137 against the US dollar. The euro has found its own troubles after the European Central Bank said economic growth was likely to be weaker than previously expected. Due to this the single currency weakened as investors questioned whether the ECB would be able to raise interest rates this year, as its current guidance indicates.

A quiet day on the hard data front with only minor sterling and euro data due to be released. Investors will likely be braced for the next wave of Brexit headlines ahead of Tuesdays debate and following vote. Little data has been available form across the pond as the US government shut down continues past the 34-day mark. The delay in government issued economic releases introduces uncertainty into the marketplace which could have a negative effect for the dollar.

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