Media reports that the UK and US have agreed to reach a trade deal by July 2020..

Federal Reserve members explained their dissents with the dollar gaining net support from expectations that the Fed would be cautious in cutting interest rates further.

With an underlying lack of confidence in the Euro-zone, EUR/USD dipped to test 1.1000. Sterling retreated with no further positive political developments helping to trigger a correction from Thursday’s strong gains.

Unease over US-China trade developments hampered risk appetite with net gains for the yen. Equity markets registered limited net losses as geo-political risks dampened sentiment.

Oil prices were supported by concerns that it would take longer than expected to restore full Saudi Arabian production at key facilities. Precious metals gained fresh support late on Friday with silver at 1-week highs.

Political rhetoric was less supportive for the UK currency on Friday with comments from Prime Minister Johnson that a fully operable deal covering the Irish border may not be achievable by October 31st. There were also reports that the EU had strongly criticised UK proposals on the Irish border. Sterling continued higher with GBP/EUR continuing to rally towards 1.1379 area while GBP/USD dipped to around 1.2470.

CFTC data recorded a decline in short, non-commercial positions to near 86,000 contracts from over 92,000 previously, but there will still be scope for substantial short covering if sentiment strengthens.

Media reports that the UK and US have agreed to reach a trade deal by July 2020 helped support Sterling, although there was inevitably a high degree of uncertainty and GBP/USD was held below 1.2500 on Monday with GBP/EUR around 1.1350.

Markets will monitor political developments with a potential announcement from the Supreme Court during Monday on whether the suspension of parliament was unlawful, and the ruling may trigger fresh volatility.

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