Pound Sterling Exchange Rates Sturdy on Reports of Brexit Deal
Negotiations around the contentious issue of the Irish border resumed yesterday, with some reports suggesting a draft agreement had been reached.
European Commission chief spokesperson Margaritas Schinas gave Britain a new deadline of midnight on Sunday to present a new Brexit divorce plan, adding that Commission President Jean-Claude Juncker was optimistic a deal could be made.
Sterling held relatively firm versus most of the majors, with most traders quietly confident that the UK government would be able to unlock future trade talks before the end of the year.
On Friday morning it was reported that a deal had been agreed following overnight talks about the Irish border. The PM announced that the Good Friday Agreement would be upheld and that there would be no hard border.
The path is now clear for the UK to proceed with talks on the UK’s future relationship with the EU.
Today’s GBP Headlines
Pound ticks higher on reports deal has been agreed – UK can move on with trade talks.
GBP/EUR exchange rate rallies 50 pips – UK manufacturing data on tap.
GBP/USD exchange rate up ahead of NFP – Strong wage growth could boost the Dollar.
Pound to Australian Dollar exchange rate surges to 17-month high – GBP/AUD up 230 pips.
Pound to Euro (GBP/EUR) Exchange Rate Drifts Higher 50 Pips
The Pound to Euro exchange rate ticked higher by around half a cent yesterday as markets reacted to rumours of a new draft Irish border agreement.
In the currency bloc it was reported that economic activity expanded 0.6% in the third quarter, equating to annualised growth of 2.6%, which was slightly higher than analysts’ predictions of 2.5% but failed to lift the single currency.
Today sees UK trade, manufacturing and industrial data released. While the trade deficit is expected print at around -£11.5 billion for October, manufacturing production is tipped to have accelerated from 2.7% to 3.8%, which could give Sterling a mild boost.
Pound to US Dollar (GBP/USD) Exchange Rate Could Soften on Sturdy US Non-farm Payroll Report
The Pound to US Dollar exchange rate appreciated by around 80 pips yesterday but still remains lower than last week’s two-month high. ‘Cable’ is only around two cents lower than a 17-month high.
The main economic release to look out for today is the November US non-farm payrolls report, which is tipped to show robust jobs growth of 195,000.
The average earnings print is also tipped to come in strongly, with analysts predicting a rise from 2.4% to 2.7%, which could bolster 2018 Federal Reserve rate hike expectations and send the ‘Greenback’ higher.
Pound to Canadian Dollar (GBP/CAD) Exchange Rate Jumps Almost 2 Cents
Sterling rallied by around 180 pips versus the ‘Loonie’ yesterday as the Canadian Dollar continued to face selling pressure following Wednesday’s dovish statement from the Bank of Canada. The Pound, meanwhile, was buffeted higher by Brexit speculation.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Surges to 17-Month High
The Pound to Australian Dollar exchange rate surged 230 pips to strike a new 17-month high yesterday and we could see Sterling publish fresh gains during today’s session if today’s run of UK news comes in positively.
Pound to New Zealand Dollar Exchange Rate Soars 280 Pips
After registering daily gains of around 280 pips yesterday, the Pound to New Zealand Dollar (GBP/NZD) exchange rate is approaching its highest levels since the week of last year’s Brexit referendum.
Data Affecting Today’s Pound Sterling Exchange Rate Forecasts
09:30 GBP Industrial Production (YoY) (OCT)
09:30 GBP Manufacturing Production (YoY) (OCT)
09:30 GBP Visible Trade Balance (Pounds) (OCT)
13:00 GBP NIESR Gross Domestic Product Estimate (NOV)
13:30 USD Change in Non-farm Payrolls (NOV)
13:30 USD Unemployment Rate (NOV)
13:30 USD Average Hourly Earnings (YoY) (NOV)
15:00 USD U. of Mich. Sentiment (DEC P)