Daily Currency Update

GBP - British Pound

The pound fell close to 1.22 vs. the US dollar yesterday amid increased concerns that the UK will be leaving the EU without a deal. The PM and German Chancellor spoke yesterday, the upshot of which being that reaching a withdrawal agreement is impossible if the EU demands N. Ireland remains in the customs union.

The pound has recovered this morning, though. A Times report suggests that the EU could be willing to make a major concession by "providing a mechanism for the Northern Irish assembly to leave a new Irish backstop after a set number of years". GBP/USD has jumped 70 points on the news and could well support the quid throughout the European morning session.

Key Movers

Risk was sold off yesterday as US-China tensions escalated as the US imposed visa restrictions on certain Chinese officials. Safe havens, including the dollar, pushed higher .

Meanwhile, US Fed Chair Powell announced yesterday that the Fed will buy more short-term treasuries to bolster the balance sheet, but made it clear it wasn't QE. Nevertheless, it makes for a more interesting FOMC meeting this evening, at which point the bank are expected to announce a cut in interest rates of 25 basis points.

Expected Ranges