Political stresses continued to undermine Sterling with fresh concerns surrounding the risk of a general election.

Rhetoric from Fed Chair Powell and, especially, Vice-Chair Clarida was generally dovish, curbing underlying dollar support, although correction pressures limited scope for further EUR/USD support.

Risk appetite held firm with global equities making headway on underlying hopes that US-China trade talks would make progress.

Demand for the yen and Swiss currency faded as wider fears declined for now while commodity currencies made significant net gains.

Oil prices recovered from early losses to trade higher as global demand concerns eased slightly.

Cryptocurrencies dipped lower amid once again amid a lack of liquidity.

Political stresses continued to undermine Sterling with fresh concerns surrounding the risk of a general election having a negative impact on sentiment. Debate on the Brexit Withdrawal Agreement continued in parliament and there were a couple of MPs reportedly switching to backing the deal, although there were still very strong expectations that the government would be defeated in next week’s meaningful vote.

Japanese Prime Minister Abe stated that the world does not want to see a ‘no-deal’ Brexit and there were expectations that parliamentary manoeuvring would continue to find a resolution. There was also a decline in implied volatilities which suggested that underlying market concerns had eased to some extent.

Oil prices recovered ground and risk conditions were broadly stable which limited the potential for Sterling selling. GBP/EUR pushed to 2019 lows below 1.1000 before bouncing to 1.1180 while GBP/USD consolidated near 1.2750.

Economic Calendar

09:30GBP Industrial Production (Y/Y)(NOV, 2018)-0.70%-0.80%
09:30GBP Industrial Production (M/M)(NOV, 2018)0.30%-0.60%
09:30GBP Manufacturing Production (Y/Y)(NOV, 2018)-0.70%-1.00%
09:30GBP Manufacturing Production (M/M)(NOV, 2018)0.40%-0.90%
09:30GBP Trade Balance(NOV, 2018)-11.40B-11.87B
09:30GBP Trade Balance Non EU(NOV, 2018)-3.70B-4.25B
09:30United Kingdom GDP (M/M)0.10.1
13:30USD CPI Ex Food & Energy (Y/Y)(DEC, 2018)2.20%2.20%
13:30USD CPI Ex Food & Energy (M/M)(DEC, 2018)0.20%0.20%
13:30USD CPI (Y/Y)(DEC, 2018)1.90%2.20%
13:30USD CPI (M/M)(DEC, 2018)-0.10%0.00%
14:00GBP NIESR GDP Estimate0.30%
18:00USD Baker Hughes US Oil Count877

*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.