GBPUSD remains trapped in a tight price range between 1.33 and 1.34, highlighted by the 1% volatility we have seen since the 23rd November. EURUSD followed in a similar fashion also and broke through 1.20 before being pushed back 0.68% to 1.1922. GBPEUR remains unchanged at its familiar level of 1.1185.
If GBPUSD is able to break the 1.35 ceiling, it could pave the way to the September high of 1.3483.
Brexit noise remains unchanged with a few comments here and there, but nothing definitive. As discussed in previous updates, this will remain the most potent influencer of sterling strength or weakness and something that needs due care and attention from any business or individuals who are exposed to the currency markets.
December typically sees outflows of cash from large US companies to daughter companies in a move to improve tax efficiencies. This pattern of USD outflows can be seen repeating itself over the past 50 years.
Eurozone inflation is due out at 10:00 with forecasts holding at 0.2%.
Canada QoQ GDP at 13:30 with analysts pricing in a 47.6% versus -38.7% prior quarter.
US Manufacturing PMI at 15:00 with forecasts expecting 58 versus 59.3 prior month.
Have a great day,
Author: Alistair Hutson, senior relationship manager