Sterling Jumps on Brexit Divorce Deal

Sterling hit a six-month high against the euro after the UK and EU reached a divorce deal. US jobs data will drive movement this afternoon.

Previous Day's Market Highlights

Sterling picked up yesterday on hopes that the UK and EU would reach a divorce deal. The gains saw GBP/EUR back above 1.1400 and GBP/USD back above 1.3400. Q3 Eurozone GDP was revised higher compared to the same period last year, from 2.5% to 2.6%. EUR/USD continued to inch lower as the dollar gains on expectations that the US tax bill will pass.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1481 1.1485 1.1092 3.42%
GBP / USD 1.3492 1.3550 1.3076 3.50%
EUR / USD 1.1751 1.1961 1.1623 2.83%
GBP/AUD 1.7949 1.7999 1.7062 5.21%
GBP / NZD 1.9709 1.9836 1.8883 4.80%
GBP / CAD 1.7335 1.7468 1.6589 5.03%

Today's Market Highlights

The pound rallied this morning after the UK and the EU reached a divorce deal ahead of next week’s EU Summit, which means that talks can soon turn to trade. Sterling hit 1.1500 against the euro for the first time in six months, whilst GBP/USD regained 1.3500.
 
Given the positive news, the pound may hold or extend these gains today. An expected slowdown in production figures (09:30 GMT) could weigh on the pound, at least temporarily.
 
In the afternoon, the November jobs report will be in focus (13:30 GMT). A strong NonFarm Payrolls figure and pick-up in wage growth could see the dollar strengthen. The figures should keep the Fed on track to hike rate on 13 December.
 
Next week is a busy one. UK economic releases include CPI, employment, and Retail Sales figures. The week also sees the latest Fed, BoE, and ECB meetings and the final EU Summit before the turn of the year.

Today's Economic Calendar

Time Currency Release Consensus Previous
09:30 GBP Manufacturing Production MoM (Oct) 0.1% 0.7%
09:30 GBP Manufacturing Production YoY (Oct) 3.9% 2.7%
09:30 GBP Industrial Production MoM (Oct) 0.0% 0.7%
09:30 GBP Industrial Production YoY (Oct) 3.5% 2.5%
09:30 GBP Goods Trade Balance (Oct) £-11.45B £-11.25B
09:30 GBP Total Trade Balance (Oct) £-3.00B £-2.75
13:00 GBP NIESR GDP Estimate 3M (Nov) 0.4% 0.5%
13:15 CAD Housing Starts s.a. YoY (Oct) 215.0K 222.8K
13:30 USD NonFarm Payrolls (Nov) 200K 261K
13:30 USD Average Hourly Earnings YoY (Nov) 2.7% 2.4%
13:30 USD Average Hourly Earnings MoM (Nov) 0.3% 0.0%
13:30 USD Unemployment Rate (Nov) 4.1% 4.1%
15:00 USD Prelim Michigan Consumer Sentiment Index (Dec) 99.0 98.5