There were reports that the government would bring the Withdrawal Agreement back to parliament again next week.

Weaker than expected German IFO data undermined the Euro amid fresh concerns over the Euro-zone growth outlook with EUR/USD posting 22-month lows below 1.1150.

The dollar benefitted from a lack of confidence and losses across most of the main rivals after dovish central bank rhetoric. The US currency index posted fresh 23-month highs.

The Canadian dollar lost ground as the Bank of Canada switched to a neutral stance. Oil prices corrected lower after a larger than expected EIA inventory build and speculation over higher OPEC output over the second half of 2019.

The tone in global equity markets was more cautious with Chinese stocks significantly lower. Precious metals were able to resist further losses despite negative sentiment.

The UK government borrowing requirement was above consensus forecasts, but the fiscal 2018/19 deficit declined to £24.7bn from £41.9bn the previous year and the lowest annual deficit for 17 years which underpinned sentiment.

Sterling was able to demonstrate some resilience during the day with GBP/EUR rising back above 1.1560, but wider US strength prevented any GBP/USD advance with only a brief recovery above 1.2950 and the pair dipped to fresh 2-month lows just below 1.2900 later in the New York session. Oil prices corrected lower and markets were unable to find convincing reasons to buy the UK currency beyond a relatively cheap valuation against other majors.

The backbench 1922 committee pressed Prime Minister May to set a resignation date if the Brexit Withdrawal Agreement was not approved, but there was no move to change the party rules to allow an earlier official challenge. There were also reports that the government would bring the Withdrawal Agreement back to parliament again next week. Sterling volatility remained lower as GBP/USD traded just above 1.2900 on Thursday while GBP/EUR rebounded towards 1.1560.

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