Good morning,
Q4 opens with a positive pound spike as markets again test the ever-strengthening resistance marks of 1.13 on the GBPEUR and 1.23 on the GBPUSD. Boris Johnson begins the important task of detailing the Brexit blueprint to the European Union over the next few days – the pound is very much at the mercy to the leading narrative around this. Whilst we have heard that what has been put forward so far is a “non-starter”, Johnson has also claimed to be “cautiously optimistic” as of yesterday with some pretty big moves being made. The pound stands poised to respond.
The EURUSD has started the quarter with the same dragging concerns, falling to a two-year low of 1.0885. German inflation data disappointed yesterday, as expected, and with Eurozone figures to follow today, the pair will be at high risk of a further knock should the results show a lack of pricing-in.
Amongst the G10 currencies, we saw the Australian Dollar lose value against most majors as the Central Bank followed global inclination to cut interest rates and supported this with a dovish signal for future decisions. Swedish and Norweigian Purchasing Manager Index figures both came in lower this morning, with the global slowing showing face in the Nordic region.
The US will publish their Purchasing Manager Index figures this afternoon, with some uplift voted for, but the main factor for movement will be focused around the UK political drive for a deal and the market’s reaction to the Eurozone figures.
Have a great day.