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Sterling Continues Rally on Hopes for Brexit Deal, GBP/AUD Hits One-Year

Pound News: Reports of Irish Border ‘Breakthrough’ Boost Brexit Optimism

The Pound (GBP) continued to tick higher against the majority of its peers on Thursday as markets became increasingly optimistic about progress in Brexit negotiations.

Yesterday’s surge in confidence was largely driven by a report from The Times that the UK government was close to a ‘breakthrough’ in talks over the Irish Border.

With only the issue of EU citizens’ right remaining to be solved by the EU summit later this month, investors are hopeful that EU leaders will allow trade discussions to get underway by the end of the year.

Euro News: GBP/EUR Exchange Rate Retreats on Impressive Eurozone Employment Data

The Pound to Euro (GBP/EUR) exchange rate initially soared on Thursday, with the pairing striking a new two-month high as market confidence in Brexit rose.

However, the single currency was able to rally later in the session as the Eurozone’s latest employment data showed that the jobless rate in the bloc fell close to a nine-year low in October.

The Euro may recoup some more ground later this morning should Germany’s Manufacturing PMI confirm that factory activity soared to a new six-year high last month.

US Dollar News: USD Weakened by Downturn in US Personal Spending

The Pound to US Dollar (GBP/USD) exchange rate also struck a new two-month high yesterday as data showed that US consumer spending dropped sharply in October after racing higher in September.

Adding to the ‘Greenback’s woes were reports of further discord in US politics as the news broke that Trump is looking to replace Rex Tillerson as State Secretary.

The US Dollar may struggle to stem its losses in today’s session as well with economists forecasting that the ISM Manufacturing PMI will reveal a slight decline in US factory activity last month.

Canadian Dollar News: GBP/CAD Stabilises Following OPEC Meeting

The Pound continued to punch higher against the Canadian Dollar (CAD) yesterday morning on hopes that the UK is close to reaching an agreement with the EU over its exit from the Union.

However, the pairing’s gains were capped by the afternoon as the Canadian Dollar was strengthened by rising oil prices on the back of OPEC’s agreement to extend crude production cuts until the end of 2018.

Canada will release a slew of data later this afternoon which may help the ‘Loonie’ recoup some of recent losses, especially if the employment and GDP figures perform as well as expected.

Australian Dollar News: AUD Fails to Benefit from Building Permit Data

The Pound to Australian Dollar (GBP/AUD) exchange rate struck its best levels since the EU referendum on Thursday on hopes that the UK is close to striking a deal with the Irish government over the border with Northern Ireland.

Not even an unexpected uptick in Australian building permit figures were able to aid the ‘Aussie’ in staving off Sterling’s advances yesterday as markets became increasingly optimistic on the UK’s chances of making sufficient progress in Brexit talks by the EU summit later this month.

New Zealand Dollar News: NZD Plummets as Business Confidence Slumps

Sterling rocketed up by over 1% against the New Zealand Dollar yesterday as investors soured on the ‘Kiwi’ in the wake of some disappointing domestic Business Confidence figures.

According to ANZ, New Zealand’s business sentiment index plummeted from -10.1 to -39.3 in November, reaching its lowest levels since the financial crisis as firms became increasingly unsettled by the changes being made by the new government.

 

Upcoming Data

Friday, 01 December, 2017

08:55             DE Manufacturing PMI (NOV)

09:00             EU Manufacturing PMI (Nov)

09:30             UK Manufacturing PMI (Nov)

13:30             CA GDP (Sep)

13:30             CA Unemployment Rate (Nov)

13:30             CA Manufacturing PMI (Nov)

15:00             US ISM Manufacturing Index (Nov)

 

Oliver Emanuel

Currency Dealer

T: (0) 1442 892 083

 

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