Daily Currency Update

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Pound strengthens as EU leaders agree on Brexit extension

GBP - British Pound

The pound rallied overnight after the EU agreed to a Brexit extension to 31st October, although the deadline can be brought forward if a deal is agreed by UK parliament sooner.

So, it's back to cross party talks for Theresa May and she'll be hoping to get closer to a deal before the next EU Council summit on 21st June.

In other news, UK GDP for February printed in line with expectations on Wednesday at 0.2% month on month, which served to support the quid through most of the morning yesterday.

Focus for cable traders today will be on any further Brexit headlines and comments from various officials following last night's decision.

Key Movers

FOMC minutes released last night contained few surprises - a majority of participants considered that the outlook for the US economy warranted leaving rates unchanged.

US inflation data was also released, a few hours before the meeting minutes. It surprised to the upside with US CPI m/m printing at 0.4% vs. expectations for 0.3%.

In other news, the ECB left interest rates on hold yesterday, as expected. President Draghi said that risks to the Eurozone economy remained to the downside but the euro remained relatively unmoved throughout.

Expected Ranges

GBP/USD: 1.3000 - 1.3150 ▲

GBP/EUR: 1.1550 - 1.1680 ▲

GBP/AUD: 1.8200 - 1.8450 ▲

GBP/NZD: 1.9250 - 1.9400 ▲

GBP/CAD: 1.7400 - 1.7550 ▲