Kantox currency update: pound jumps on hopes of a Brexit deal
5 September 2018 · 2 min read
The sterling bounced up on Wednesday after Bloomberg reported that Germany has dropped some demands to the UK, which paves the path for a post-Brexit partnership deal.
The dollar has pulled back from recent highs, although it remains supported amid the overall risk aversion on the global trade tensions and by the weakness of emerging market currencies.
EUR/USD: sideways movement around 1.1600: The euro bounced up at 1.1530 lows fuelled by dollar weakness on Wednesday to be capped at 1.1655 and the pair remains trapped in a range around 1.1600. As at London market opening times, the EUR/USD is trading at 1.1625.
GBP/USD: bounces from 1.2800 on Brexit deal news. The pound bounced sharply from 1.2800 on Wednesday to reach intra-day highs near 1.3000 boosted by news of an initial agreement on EU-UK partnership agreement, although the pair has trimmed gains over the last sessions, returning to 1.2900 area. As at London market opening times, the GBP/USD is trading at 1.2905.
USD/JPY: capped below 111.80. US dollar rebound from last week lows at 110.70 was capped yesterday right below one-month highs at 111.80, and the pair retreated to 111.50 area. As at London market opening times, the USD/JPY is trading at 111.45.
In the Calendar Today
Today we will have a string of indicators in the US calendar, with particular interest on the ADP employment report. This report will be observed as an advance of Friday’s non-farm payrolls data, due on Friday, and might have a significative impact on the dollar.
12:15 GMT USD: ADP employment report (Aug)
Previous: 219K Expected: 190K