Sterling was undermined by the very acrimonious political tone as parliament resumed business..

The dollar strengthened to 10-day highs, primarily reflecting a lack of confidence in other major currencies, while higher US yields were also supportive. The Euro failed to make headway and EUR/USD dipped to near 2-year lows.

Sterling was undermined by the very acrimonious political tone as parliament resumed business.

There was optimistic rhetoric on US-China trade from President Trump, although market conviction was lacking as impeachment manoeuvring continued.

Global equity markets were little changed despite US gains with fears that rhetoric could rapidly turn negative again.

Precious metals were undermined by higher yields and dollar gains but found support at key levels. Bitcoin stabilised, but without a significant recovery.

UK mortgage approvals declined slightly to 42,600 for August from 43,300 previously. The CBI retail sales survey recovered to -16 for September from -49 previously with a net positive figure for the car sector, although this was the fifth successive figure in negative territory and retailers expected another decline for October amid weak underlying sentiment.

The House of Commons resumed business after its suspension had been deemed unlawful, but the confrontational rhetoric increased fears that there would be no compromise to reach a Brexit deal. In this environment, Sterling lost ground as the high degree of uncertainty undermined confidence amid fears over a lack of inward investment.

European Parliament Brexit coordinator Verhofstadt stated that the UK had only presented potential components as an alternative to the Irish backstop. Sterling lost ground steadily with EUR/GBP moving above 0.8850 despite vulnerability elsewhere while GBP/USD declined sharply to lows below 1.2350 before a marginal recovery.

Economic Calendar

07:00German GfK Consumer Confidence (OCT)9.79.7
09:00ECB Economic Bulletin--
13:30USD GDP (Annualized)3.10%2.00%
13:30USD GDP Price Index (Q/Q)0.80%2.50%
13:30USD Goods Trade Balance(AUG)--72.46B
13:30USD Continuing Jobless Claims1.665K1.661K
13:30USD Initial Jobless Claims212K208K
13:30USD Wholesale Inventories-0.20%
15:00USD Pending Home Sales (M/M)(AUG)--2.50%
15:00USD Pending Home Sales (Y/Y)(AUG)-105.60%

*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.