Kantox currency update: the pound picks up ahead of the Brexit debate
The pound sterling has appreciated over the last sessions, to approach one-month highs against the euro and the dollar, with all eyes on the UK parliament, which is due to debate Theresa May’s Brexit deal this week.
The euro has also regained lost ground against a somewhat weaker dollar, with the market assimilating that the global economic slowdown will force the Fed to take a pause on their monetary tightening cycle this year.
EUR/USD erases last week losses to approach 1.1500. The euro advanced on Monday for the third consecutive day, to retrace last week losses and return to key resistance area near 1.1500. As at London market opening times, the EUR/USD is trading at 1.1445.
GBP/USD: approaches resistance area at 1.2800. The pound appreciated on Monday to extend recovery after last week’s “flash crash” to 1.2375, returning to levels near one-month highs, at 1.2815, ahead of the crucial Brexit parliamentary debate. As at London market opening times, the GBP/USD is trading at 1.2760.
USD/JPY ticks up to 109.00. The US dollar has been picking up against the yen over the last three days after plummeting to 104.60 last week, although the pair remains at 7-month lows in the 109.00 area. As at London market opening times, the USD/JPY is trading at 108.90.
In the Calendar Today
Today we will have a very thin calendar with a set of business and industrial confidence indicators in the Eurozone which are expected to have deteriorated in line with the global economic prospects, although the impact on the euro will be minor.
In the US, the only indicator worth mentioning will be November’s trade balance. The trade deficit is expected to have narrowed slightly, yet, it is not expected to have a significant impact on dollar volatility.
10:00 GMT EZ: Business Climate Index (Dec)
Previous: 1.09 Expected: 0.99
13:30 GMT US: Trade Balance (Nov)
Previous: -55.5B Expected: 54.0B