Optimism seems to be growing for a Brexit deal, and as such GBP/USD has pushed higher over the last 24 hours, opening this morning close to - but shy of - the 1.32 big figure. There are a few different and recent reasons for this change in sentiment. First up, a Dow Jones report surfaced yesterday suggesting that a deal could be done by as early as Monday. A Times piece, meanwhile, has stated that Theresa May is expected to outline a compromise proposal on the Irish border to her Cabinet next Tuesday. It was also reported by the same paper that a group of 30-40 Labour MPs were prepared to defy Corbyn and back the Chequers deal. Further to these headlines, Dominic Raab spoke before the Commons yesterday and said that negotiations with the EU had intensified and that they were engaging with the EU on alternative Irish backstop proposals.
Overall, it was a positive day for the pound, linked to the seemingly increased likelihood of a Brexit deal.
Today looks to be even more eventful for the pound with markets looking to GDP and Manufacturing Production for direction. The headline GDP number is expected to print at 0.1% month-on-month, a slight contraction on the previous month’s reading of 0.3%.