There was muted Sterling reaction to the House of Commons vote for a December 12th General Election.

Narrow ranges prevailed on Tuesday with limited activity ahead of Wednesday’s key US events. The dollar drifted marginally lower ahead of the Fed decision as European currencies held steady.

Global equity markets failed to extend gains on reports that signing of the US-China limited trade deal may be delayed.

There are still very strong expectations that the Federal Reserve will cut interest rates for the third successive meeting to 1.75%. Forward guidance within the statement and from Chair Powell will be crucial for the dollar’s reaction and he is likely to be as non-committal as possible. Narrow ranges prevailed in early Europe with EUR/USD above 1.1100 as expectations of a slightly less dovish Fed stance limited dollar selling with US jobs and GDP data are also set for release.

UK mortgage approvals were marginally above consensus forecasts while net lending to individuals was unchanged on the month at £4.6bn. Sterling tended to lose ground early in the European session as uncertainty prevailed.

The UK currency did move higher ahead of the New York open amid reports that the Labour Party would now back a December General Election. The UK currency drew some support from expectations that the Conservative Party would secure a majority. Nevertheless, there was a high degree of uncertainty over the outlook with a number of volatile political factors potentially in play and markets were also braced for choppy trading over the next few weeks.

GBP/EUR was little changed around 1.1585 at the European close with a GBP/USD peak near 1.2900.

The House of Commons did approve a General Election for December 12th with the parliamentary session set to close on November 5th. The market reaction was muted as GBP/USD held above 1.2850 with major uncertainty over the potential outcome. Sterling edged higher in Europe on Wednesday as global risk appetite held steady.

Economic Calendar

00:30AUD CPI (Y/Y)1.70%1.60%
00:30AUD RBA Trimmed Mean CPI (Y/Y)1.50%1.60%
00:30AUD RBA Trimmed Mean CPI (Q/Q)0.40%0.40%
06:30GDP Detailed QQ0.30%0.30%
07:45Consumer Spending MM(SEP)-0.00%
08:00Business Confidence(OCT)10098.8
08:00Consumer Confidence(OCT)-112.2
08:00CHF KOF Leading Indicator(OCT)96.293.2
08:55German Unemployment Change(M/M)(OCT)5K-10K
08:55German Unemployment Rate(M/M)(OCT)5.00%5.00%
09:00CHF ZEW Expectations(OCT)--15.4
09:50German Buba President Weidmann speech--
10:00Euro-Zone Consumer Confidence(OCT)--
11:00Germany CPI (M/M)(OCT)-0.00%
11:00Germany CPI (Y/Y)(OCT)1.30%1.20%
11:00Germany Harmonised CPI (M/M)(OCT)--0.10%
11:00Germany Harmonised CPI (Y/Y)(OCT)-0.90%
11:00USD MBA Mortgage Applications--11.90%
12:15USD ADP Employment Change(OCT)132K135K
12:30USD GDP Price Index (Q/Q)1.90%2.60%
13:30USD GDP (Annualized)1.60%2.00%
14:00CAD BoC Rate Decision1.75%1.75%
17:30European Central Bank Sabine Lautenschlaeger Speaks--
18:00USD FOMC Statement--
18:00FOMC Interest Rate Decision--
21:45NZD Building Permits (M/M)(SEP)-0.80%

*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.