Sterling registered net losses as the government push for a December General Election.

The Euro was undermined by disappointing German PMI data with no lift from ECB rhetoric. The dollar made tentative net gains despite weaker durable goods orders data as manufacturing PMI data provided some relief.

The Canadian dollar bucked the trend of weaker commodity currencies. Activity was stifled by uncertainty ahead of next week’s key monetary policy decisions with slight overall equity-market gains and little change in bond yields.

Sterling registered net losses as the government push for a December General Election reinforced Brexit uncertainty.

Oil prices posted gains, but failed to hold best levels amid demand reservations. Precious metals made net gains despite a firm US dollar with silver at 2-week highs.

The Swedish krona gained initially after the Riksbank signalled a likely December rate increase, but failed to hold gains.

The ECB made no policy changes, in line with consensus forecasts. In his final press conference, bank President Draghi stated that incoming data indicates more protracted weakness and prominent downside risks with a highly accommodative monetary policy needed for a prolonged period. Despite a brief move higher, the dovish overall rhetoric undermined the Euro.

Sterling briefly moved higher in early Europe on Thursday, but gains reversed quickly in choppy trading and it drifted weaker into the New York open as speculation dominated trading. There was no evidence of the government bringing the Brexit Bill back to debate and rumours that the government would push for a General Election increased. As these rumours gathered pace, Sterling weakened with GBP/USD lows below 1.2800 as GBP/EUR dipped to around 1.1530.

Prime Minister Johnson confirmed that he was looking for an election on December 12th and, if approved by parliament, the government would aim to complete the passage of Brexit legislation in the first week of November. There was uncertainty whether opposition parties would back an election amid major divisions within the Labour Party.

Markets were also waiting for the EU’s response to the extension request with both sides waiting for the other to move first and particular reservations within France. Major uncertainty curbed Sterling support as GBP/USD traded just below 1.2850 on Friday with GBP/EUR around 1.1570.

Economic Calendar

07:00German GfK Consumer Confidence (NOV)9.79.9
09:00German IFO Business Climate Index(OCT)94.594.6
09:00German Business Expectations(OCT)90.990.8
09:00IFO - German Current Assessment(OCT)9898.5
15:00USD Michigan Consumer Sentiment(OCT 01)9696

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.