GBP: Political uncertainties have once again flooded into Sterling, with contradicting reports, as yesterday saw David Davis stick to past rhetoric, stating that ‘no deal is better than a bad deal’. However, some positive developments are evident in terms of Brexit negotiations as FT reports circulated that the UK and EU have struck an agreement on dividing up WTO quotas that govern the import of farm products. GBP is marginally higher against its major counterparts, EUR/GBP has held yesterday’s high, with offers around 0.8880 level curbing and trades inside the previous day’s trading range. Cable sees similar action, residing inside of Tuesday’s range, with offers touted between 1.3300-13350. Today’s services PMI reading printed firmer than analyst estimates, subsequently pushing GBP to 1.3280, stalling just ahead of 1.33.
USD: The DXY suffered throughout most of the day, as reports of President Trump’s shortlist for the forthcoming available Fed Chair seat began to price into markets. The likelihood of a banker with a dovish skew in their views is growing, with the candidates being spoken about: Current Fed Chair Yellen, Warsh, Powell, Cohn, and outside calls of notable dove Kashkari, alongside University of Stanford’s Taylor. However, firm US data in the form of ADP Employment Change and ISM NonManufacturing PMI saw the USD-index recoup the majority of its losses.
EUR: Relatively tepid session for EUR despite the political turmoil in Spain, which looks set to take a turn for the worse with Catalan leaders likely to declare independence in a matter of days. Eyes will be on Draghi who is scheduled to 17:15.