GBP/USD wobbled a bit on the back of a few Brexit related headlines yesterday. Theresa May held a cabinet meeting in the hope of getting some agreement on a draft deal and a compromise plan for the Irish backstop. No decisions were made, apparently, but at least there were no walk outs. Ministers were also told to expect to be summoned again soon, at which point they may be asked to endorse a plan. As Dominic Raab left the meeting, he gave a thumbs up, enough to move GBP/USD a few points higher on the day. More generally, given there was no negative news arising from the meeting, hopes remain for a deal being drafted and done soon, which in itself was enough to lend support to the pound. GBP/USD has since broken through the 1.31 interbank figure and trades towards the top of its most recent range in early London.
A weaker USD helped cable push through the 1.31 too, a result of the Democrats taking a majority in the House and the Republicans holding the Senate in the American midterm elections, a definite blow to the Trump administration (more to follow on this in the USD section).
There’s no major economic data due for release today, either from the US or the UK. Brexit headlines will no doubt continue to be heavily scrutinised, but for now it seems markets are generally more positive than they have been recently, which will likely continue to support the pound in the near term.