The pound remained low on Friday, poised for a second consecutive week of losses as the home currency eyed a summit on Sunday where British and EU policymakers were deciding the fate of the Brexit deal. Despite eleventh-hour objections from Spain over Gibraltar an agreement was approved by EU leaders yesterday, with Theresa May declaring the deal ‘delivered for the British people’. The next hurdle for the pound is now whether opposition from British MPs will scupper the deal at a parliamentary vote next month. UK Parliament is set to vote on the deal on 12thDecember, but its approval is far from guaranteed at this stage. Sterling remains below 1.13 against the euro while cable continues to trade under 1.29 at the start of this week.
The week ahead.
GBP - It will be another significant week for the pound with Theresa May’s agreed deal no doubt under the spotlight again. With the vote in parliament scheduled for the 12th December the pound is likely to remain subdued until then. Away from Brexit, from a data perspective, the week is fairly quiet for the pound. Mark Carney will make a speech this afternoon before bank stress test data and the Bank of England’s stability report is released on Wednesday. Thursday brings consumer lending figures although all of these releases will pale into insignificance alongside any Brexit murmurs.
EUR – The euro starts the week focusing on words from the ECB president, Mario Draghi, at 14:00 this afternoon. His speech will be listened to closely as always for any clues to future monetary policy decisions. The single currency can catch its breath over the next couple of days before Thursday hosts another speech from the head of the central bank alongside CPI and GDP numbers from across the eurozone while Friday brings retail sales from Germany as well as an update to the region’s unemployment rate.
USD – The dollar doesn’t have any specific data to fixate on today, so its moves will likely be dictated by the pound and euro. Tomorrow, consumer confidence numbers and a speech from FOMC member, Bostic, will give investors something to focus on while Wednesday sees Preliminary GDP figures for the quarter as well as a speech from the Fed Chair, Powell. The week draws to a close with the latest release of minutes from the FOMC’s last meeting on Thursday before a two-day G20 meeting begins on Friday.