Kantox currency update: hopes of a Brexit deal boost the pound
29 August 2018 · 2 min read
The pound rallied against its main rivals on Wednesday, fuelled by investors’ relief after the European negotiator, Michael Barnier, announced that they are prepared to offer Britain an unprecedented partnership, which has eased concerns about the possibility of a no-deal Brexit.
The dollar has remained on the defensive, trading near 4-week lows against a basket of the most traded currencies, despite the upward revision to the US Gross Domestic Product figures.
EUR/USD: consolidating around 1.1700: Euro recovery from August lows at 1.1300, seems to have stalled at 1.1735, but the pair remains steady above 1.1650. As at London market opening times, the EUR/USD is trading at 1.1715.
GBP/USD rallies to three-week highs above 1.3000. The pound appreciated almost 1.5% on Wednesday, buoyed by the expectations of a trade deal between the UK and the EU, to reach levels past 1.3000 for the first time in three weeks. As at London market opening times, the GBP/USD is trading at 1.3025.
USD/JPY: four-week highs above 111.50. The dollar advanced against the yen on Wednesday supported by better than expected US GDP figures and a brighter market sentiment, to reach levels near 112.00. As at London market opening times, the USD/JPY is trading at 111.65.
In the Calendar Today
In the US, we will have the release of a string of US indicators scheduled, with special interest on the US personal income and spending data. These are two key indicators of economic activity and very closely observed by the Fed, therefore, they tend to have a relevant impact on US dollar volatility.
12:30 GMT US: Personal Income (Jul)
Previous: 0.4% Expected: 0.3%
12:30 GMT US: Personal Spending (Jul)
Previous: 0.4% Expected: 0.4%