Yesterday’s trading remained relatively tentative, with the pound struggling to break any real barriers. GBPUSD backed well away from 1.25 whilst GBPEUR struggled to maintain levels close to 1.13.
Following yesterday’s Brexit meeting with Juncker, the general consensus is that we are no closer to reaching an agreement. Boris Johnson’s plan will go to court this week, with the recall of parliament at stake if the decision is made that motives were more insidious from Johnson.
Expect the pound to be reactive this week, with the sentiment around achieving a deal directly pushing and pulling the currency around.
EURUSD continued its fight with a gradual slide away from the key 1.11 mark yesterday and breaking a key support level of 1.1020.
Germany ZEW confidence figures will be released this morning at 10:00, which has previously proved a strong indicator of the current market sentiment around EU conditions. Expect a strong reaction, as EURUSD will likely be levered on this. A negative reading may knock the pair into the 1.09 region.
Outside of the developments with Parliament and an array of UK economic data set for release tomorrow morning, the key remains in the Federal Reserve meeting tomorrow afternoon.
If you have any US Dollar exposure this week, it is key to consider the risk events this week. Reach out to your account manager who can support with forecasting and rate targeting.
Have a great day.