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Differing reports emerge from Luxembourg over Brexit

GBP - British Pound

Yesterday Boris Johnson met with European Commission President Jean-Claude Junker in Luxembourg. Unsurprisingly however the reports from the two camps differed vastly as Johnson and co. announced afterwards that a Brexit deal was beginning to emerge whilst Junkers stated the opposite. The pound took its cue yesterday from this and was generally soft. Meanwhile the Luxembourg Prime Minister Xavier Bettel said he could scupper any Brexit extension if it didn't serve any critical purpose making him a key ally for Johnson. Remember to grant an extension the decision needs to be unanimous.

There is no rest for the government as their lawyers however as they are back in London today for the start of the court sessions at the UK Supreme Court to decide whether the prorogation of Parliament was unlawful.

Key Movers

It was all about oil prices yesterday as the fallout from the attacks on the Saudi Arabia oil production facility settled. Crude oil prices have dropped back towards $68.76 as President Donald Trump struck a more moderate tone regarding retaliatory action. Iran have denied the attacks stemmed from Iranian soil and have instead threatened action against US military bases in the area. Whilst outright military action remains low, tensions in the region remain high and as long as this is the case the market will favour safer assets.

The Euro had a torrid time yesterday, caught between its own weakness and a dollar funding shortage which saw EUR/USD tumble back towards 1.1000. The ECB's chief economist Phillip Lane stated that the move to get inflation towards 2% is now going backwards and whilst this news isn't new it was enough to see the Euro drop off.

Expected Ranges

GBP/USD: 1.2320 - 1.2430 ▼

GBP/EUR: 1.1150 - 1.1300 ▼

GBP/AUD: 1.8010 - 1.8200 ▼

GBP/NZD: 1.9570 - 1.9650 ▲

GBP/CAD: 1.6410 - 1.6500 ▼