Political uncertainty sapped Sterling support as parliamentary deadlock persisted.

The dollar held firm on Friday as other major currencies were unable to regain traction with caution ahead of this week’s key events.

German business confidence stabilised, but the Euro was unable to make headway amid underlying growth concerns.

Political uncertainty sapped Sterling support as parliamentary deadlock persisted. Risk appetite held firm on hopes for US-China progress with global equity markets securing net gains.

The yen and Swiss franc lost some ground as defensive demand remained limited. Oil prices were supported by a dip in US drilling rigs and hopes for sustained OPEC production restraint.

Precious metals failed to hold intra-day gains as defensive demand remained limited.

Bitcoin surged dramatically with a temporary move above $10,000 helped by positive rhetoric from Chinese President Xi.

Sterling lost ground ahead of Friday’s New York open with Brexit uncertainty continuing to sap confidence. A lack of clarity over UK intentions was amplified by uncertainty over the EU stance towards a further extension.

EU Ambassadors agreed in principle to an extension, but there was wrangling over the details with France initially indicating that it would only back an extension until November 30th. Overall, GBP/USD declined to test 1.2800 before recovering to near 1.2830 while GBP/EUR settled little changed around 1.1583.

CFTC data recorded a notable decline in short, non-commercial Sterling contracts to a 3-month near 52,500 in the latest week from 73,000 previously, lessening the potential for further very aggressive position adjustment.

On Monday, the House of Commons will debate whether to approve a December 12 General Election with expectations that it will be rejected amid parliamentary deadlock. The EU will also hold a final meeting to decide its extension stance, maintaining extremely high uncertainty. GBP/USD held around 1.2825 with GBP/EUR close to 1.1585 in tentative conditions.

Economic Calendar

11:00CBI Distributive Trades Survey(OCT)-25-16
13:30USD Goods Trade Balance(SEP)-73.06B
15:30USD Dallas Fed Manufacturing Business Index(OCT)1.5

*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.