8th October 2018- Brexit hopes triggered Sterling gains amid relatively optimistic comments from EU officials

 

     

Brexit hopes triggered Sterling gains amid relatively optimistic comments from EU officials

US employment data was mixed with a miss on headline payrolls offset by a strong upward revision and the lowest unemployment rate for 48-years while annual earnings growth slowed slightly.

The dollar registered a slight net retreat, although it regained some ground on Monday amid higher US yields and hawkish Fed rhetoric.

Brexit hopes triggered net Sterling gains amid relatively optimistic comments from EU officials over the potential for a deal this year.

China eased monetary policy over the weekend, although global equity markets remained on the defensive as Chinese market re-opened after the week-long holiday.

Oil declined on the possibility that Iran sanctions could be eased slightly while precious metals declined amid US strength and higher bond yields.

Early in Friday’s European session there were comments from EU sources that the Brexit divorce deal with Britain was very close which underpinned Sterling sentiment. There were also reports that the EU was ready to offer the UK a supercharged Brexit deal, although the Irish border was still an issue. Sterling continued to gain ground on expectations that the two sides were edging towards a deal. EUR/GBP dipped to 3-month lows below 0.8800 while GBP/USD pushed above 1.3100.

There was also positive rhetoric from EU Commission President Juncker who stated that the chances of a UK-EU deal had increased and could be agreed by November. European Council President Tusk also expressed optimism over the situation.

CFTC data recorded a decline in Sterling shorts, although there was still a substantial net short, maintaining the potential for substantial position liquidation if sentiment improves further.

Markets were still concerned that any UK Brexit concessions would make it even more difficult to secure parliamentary agreement. EUR/GBP was held near 1.1380 on Monday with GBP/USD edging below 1.3100.

 

     
 
       
 

GBP/EUR 

– 1.1384
 
 

GBP/USD

– 1.3110

 
 

GBP/CHF 

– 1.2998

 
 

GBP/JPY 

– 149.18

 
 

GBP/AUD 

– 1.8564

 
 

GBP/NZD 

– 2.0337

 
 

GBPCAD

– 1.7006

 
 

GBP/ZAR 

– 19.4504

 
 

GBP/NOK 

– 10.8299

 
 

GBP/SEK 

– 11.8820

 
 

EUR/USD 

– 1.1511

 
       
  All rates are indicative of interbank rates*  
       
 
 

GBP/EUR

 
 

GBP/USD 

 
 

EUR/USD 

 
       
 
   

07:00 EUR

German Industrial Production (M/M)

0.30%

-1.10%

 
   

09:30 EUR

UK Halifax HPI (M/M)

-

0.1

 
   

13:30 USD

US Non-farm Payrolls (M/M)

-

-

 
   

13:30 USD

Euro-Zone Sentix Investor Confidence 

11.9

12

 
 
   
 
 
*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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