The pound has benefitted from a constructive Brexit meeting between the UK and EU. UK Prime Minister Theresa May has been over in Brussels hoping to find a solution to the current Brexit stalemate, and both parties seem to be happy with the progress. Theresa May is seeking legally binding changes to the backstop that ensure it can’t be indefinite, and following the meeting May stated that “We’re making progress”. It is very unlikely that the Brexit deal will be voted through Parliament without these legal guarantees being in place, so this is a very important step. The pound is currently sitting comfortably above 1.15 and 1.30 versus the Euro and US Dollar respectively.

The dollar retraced some of its recent losses yesterday following the minutes of the Federal Reserves latest policy meeting. The Fed stated that the US economy and labour market remained strong, a much more hawkish stance than was expected prior to the release. This increased speculation of at least one rate hike across the pond this year and the dollar strengthened accordingly.

Todays Key Data Releases

We have already had some French, German and Eurozone manufacturing and services data released early this morning. This data was mixed and has done little to affect the single currency.

UK Public Sector Net Borrowing numbers, released at 9:30 GMT, have the potential to move GBP crosses. A large surplus is expected to be announced which could lend the pound some further strength.

The ECB will be releasing the minutes from their last policy meeting. This will be closely scrutinised for any hints towards future monetary policy.

Durable Goods Orders, released over in the US this afternoon, could cause some dollar volatility.

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