GBP/USD trended lower through Tuesday’s morning session amid a lack of any meaningful and positive Brexit headlines. Trump’s comments the previous night, when he indicated May’s Brexit deal wasn’t a good one, got a negative reaction from Cable traders the following morning in London. The dollar was also well bid through much of the day yesterday, with month-end dollar buying kicking in a little earlier than usual and risk sentiment turning weaker as Trump talked auto tariffs, again.
There isn’t much by way of UK economic data due this morning, so the key driver will likely be Brexit headlines/rhetoric and the risk play. The Bank of England Financial Stability Report is due to be released this evening, along with Bank Stress Test Results, followed by a speech from BoE Governor Carney. The central bank will be publishing assessments for various Brexit scenarios, measured against a comparison of remaining in the EU. Should be interesting! Around the same time, US Fed Chair Powell is speaking about monetary policy, a keenly awaited speech. In advance of all this, Q3 GDP is released from the States, also a keenly awaited set of data, and so it all makes for a potentially volatile afternoon session for GBP/USD this afternoon.