6th December 2017 - Sterling was subjected to choppy trading as political uncertainty dominated

 
     

Sterling was subjected to choppy trading as political uncertainty dominated

The dollar made limited net headway on Tuesday as 2-year yield spreads widened, although the currency was unable to hold its best levels as longer-term yields edged lower amid growth uncertainty and concerns surrounding a possible government shutdown.

Sterling was subjected to choppy trading as political uncertainty dominated with slight net losses as markets waited for fresh Brexit developments amid a pressing timetable.

US equity markets came under pressure late in the New York session and the negative mood spilled over into Asia on Wednesday with the MSCI Asia-Pacific index declining to 2-month lows.

The UK PMI services-sector index declined to 53.8 for November from the 6-month high of 55.6 the previous month. There was, however, an increase in order backlogs for the month and business optimism strengthened slightly. Inflation trends were significant with the input prices rising at the fastest pace since the first half of 2011 while output prices increased at the fastest pace since February 2008.

There was little overall reaction to the data with market attention focussed firmly on political developments. Intense diplomatic activity continued with the UK government seeking to resolve differences and find an Irish border solution. The timetable remains very tight with Brussels negotiators needing agreement this week and expecting fresh proposals on Wednesday.

Sterling came under pressure in early Europe, but gradually regained support on hopes for an eventual deal. GBP/USD moved to 1.3450 from lows below 1.3380 with EUR/GBP retreated back below 0.8800.

Underlying uncertainty and a more defensive tone surrounding risk contributed to a slightly weaker Sterling tone on Wednesday with EUR/GBP back above 0.8800.  

     
 
       
 

GBP/EUR 

– 1.1337

 
 

GBP/USD

– 1.3407

 
 

GBP/CHF 

– 1.3233

 
 

GBP/JPY 

– 150.21

 
 

GBP/AUD 

– 1.7682

 
 

GBP/NZD 

– 1.9410

 
 

GBP/CAD

– 1.7025

 
 

GBP/ZAR 

– 18.1272

 
 

GBP/NOK 

– 11.1068

 
 

GBP/SEK 

– 11.2455

 
 

EUR/USD 

– 1.1826

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

08:00 EUR

ECB Non-monetary Policy Meeting

-

-

 
   

08:15 CHF

Swiss CPI (Y/Y)

0.90%

0.70%

 
   

10:30 EUR

ECB Metsch Speaks

-

-

 
   

13:15 USD

US ADP Employment Change

190K

235K

 
 
   
 
 
*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time.  CentralFX are not responsible for the rates shown.
 
 
 

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