GBP - British Pound
Yesterday’s UK Retail sales figures for November came in well under expectation at -0.6% to add further pressure to a struggling pound. Yesterday also saw the final Bank of England meeting of the year which produced a 7-2 vote in favour of keeping interest rates on hold at 0.75%. Sterling dropped roughly half a percent against the USD and EUR after the announcement.
Today MPs will vote on whether to back prime minister Boris Johnson’s plan for the UK to leave the EU on 31st of January. The withdrawal agreement bill would also include a clause banning the government from extending the transition period beyond December 2020, something that has reignited concerns around a hard Brexit and has subsequently served to weaken sterling over the course of this week.
With the Conservatives having won an 80-seat majority at last week's general election, the bill is likely to be met with little resistance and be passed, before it faces legal scrutiny in the house of Lords. Sterling has fallen just over two and half percent against the Euro (1.1710) and US Dollar (1.3020), and over 3% against AUD (1.8890) since the start of this week, and we could well see further downward pressure on the pound upon approval of the bill in the commons today.
UK GDP figures are released at 09.30 this morning, however the expectation is for no change on last month's figure of 0.3% - if the figure comes in above expectation then Sterling could receive a much-needed lift, similarly a lower number could further weaken the pound.
Across the pond, the focus will return to markets following a week dominated by politics and the news of President Trump’s impeachment. GDP figures in the US are released at 13.30 today, whilst core-PCE is released at 15.00, with inflation expected to have held at 1.6%. Meanwhile the formalization and signing of phase 1 of the US China trade agreement is expected in January.
Canadian retail sales are released at 13.30 today and could provide a slight lift to the Loonie, with an increase of 0.6% vs last months figures expected.
1.3010 - 1.3060 ▼GBP/EUR:
1.1670 - 1.1760 ▼GBP/AUD:
1.8860 - 1.8940 ▼