It was a mixed session for cable yesterday. The pair came under selling pressure after US data printed stronger than expected. The Brexit headlines didn’t help sterling’s cause either, and it’s a surprise the most recent headlines aren’t having a more negative impact on the pound this morning; Brexit Secretary David Davis is opposed to Theresa May’s plan for a temporary customs arrangement. He is concerned that without an end date the arrangement could continue indefinitely. The PM will be meeting with the senior minister today to try and resolve the ongoing tensions, so watch this space.
GBP/USD is higher again this morning, mostly a result of a weakening greenback. Risk sentiment remains positive as evidenced by the performance of equity markets overnight in Asia, prompting this mild move out of the USD. However, there are a few worries about this weekend’s G7 meeting and whether that might result in further heated debate, perhaps even proposed action, on tariffs and Iran.
There isn’t any major economic data on the way from the UK today. MPC member Ramsden is due to speak later on in the day, but Brexit headlines, the war of words on tariffs and more geopolitics will likely dominate.