Daily Currency Update

GBP - British Pound

Prime Minister Boris Johnson will be keeping his fingers crossed today as he goes back to Parliament to seek approval for a general election on 12th December. Whilst this is unlikely to get the 2/3rds backing with Jeremy Corbyn set to vote against it, it still shows Johnson's intentions and his confidence to prevail in any polls. Meanwhile in Brussels the EU has agreed today an extension to Brexit until 31st January with the ability to leave at the end of each month before that if a deal is ratified in Parliament. This 'flextension' removes another level of uncertainty once and for all the pound but its performance now over the next few weeks will be general election dependent.

Key Movers

With Mario Draghi taking the limelight last week for the final time focus this week turns back to Jerome Powell and the Fed meeting on Wednesday. The shift in policy is now in full force with the Fed expected once again to cut rates by a further 25bps to 1.5% - 1.75%. The US is at a critical juncture now and with Powell announcing in September that policy was now largely data dependent focus will also be on the first look at Q3 GDP as well as jobs numbers and personal spending.

Across the board there has been a pick up in risk appetite in the market with bond yields increasing as well as some of the major indices. Over the weekend there was positive news out of China who announced that the text for the first phase of the trade agreement had been 'basically completed'. The trade war still remains key for the global outlook.

Expected Ranges