The worry around trade has temporarily eased, allowing the euro to gain on the U.S. dollar. Anticipation is rising around a panel discussion in Portugal this morning where the leaders from some of the world’s top central banks will speak. Sterling is rising on hopes of a compromise allowing Theresa May’s government to win a crucial vote today.
Focus turns to central banker panel
As trade concerns still linger in the background, investors are looking to a panel discussion this morning for fresh direction.
The European Central Bank’s conference in Sintra, Portugal is bringing together some of the world’s top bankers. On Tuesday, the ECB President Mario Draghi’s dovish tone once again weighed on the euro. Draghi confirmed that the bank will be patient in raising interest rates and it would be at a slow pace if it happened in September 2019.
Investors are watching the panel started at 9:30 a.m. EST between Draghi, Reserve Bank of Australia Governor Philip Lowe, Bank of Japan Governor Haruhiko Kuroda, and Federal Reserve Chairman Jerome Powell. It’s unlikely the leaders will announce any drastic monetary policy shifts, but with trade consuming the past two days, it is a welcome distraction. However, trade concerns could be a topic of discussion.
EUR/USD was trading up ahead of the panel discussion around 1.159. The pair reached as low as 1.155 earlier.
Sterling spikes on vote compromise
The amount of influence the U.K. parliament will have on the Brexit process will be decided later today as the House of Commons votes on an amendment to the E.U. withdrawal bill.
Earlier in the week, the House of Lords approved an amendment giving parliament a “meaningful vote” on Brexit conditions and the deal with the European Union.
The House of Commmons was set to vote on that measure today, however, Prime Minister Theresa May’s government is offering a compromise.
The government and parliament agree that the deal will be presented to parliament, allowing them to approve or reject it. However, the government says parliament can debate next steps of any deal, but not amend it. May and her team say this would hinder future negotiations with the E.U. Others argue that allowing parliament to amend it makes the final vote on a Brexit deal truly “meaningful.”
The House of Commons now has to decide which version to approve. If they approve the more meaningful vote, it would be a blow to May’s leadership and could be ammo for those calling for her removal.
GBP/USD is trading up around 1.319 on news of a potential compromise. A vote is expected by 11 a.m. EST.
U.S. existing home sales are expected to rise to 5.52 million in May compared to 5.46 million in April. That’s coming up at 10 a.m. EST.
Thursday, the economic headliner is the Bank of England’s monetary policy statement and interest rate decision. The BoE is expected to hold rates steady. Later in the day, Governor Mark Carney’s speech will be watched closely.