Strong Sterling Ahead of Budget Tomorrow

The week started with another quiet trading session which saw both GBP/USD (Cable)and GBP/EUR trade in narrow 70 pip ranges. Despite this, we have now seen Cable rally for 7 straight trading days, representing a rise of 1.6%. This can be put down to continued pressure on the US dollar as Trump struggles to pass his proposed tax reforms before Thanksgiving.

Previous Day's Market Highlights

The week started with another quiet trading session which saw both GBP/USD (Cable)and GBP/EUR trade in narrow 70 pip ranges. Despite this, we have now seen Cable rally for 7 straight trading days, representing a rise of 1.6%. This can be put down to continued pressure on the US dollar as Trump struggles to pass his proposed tax reforms before Thanksgiving.

The macro calendar was quiet once again, with only the US CB Leading Index of note. This was released at 1.2% m/m, double the forecast figure. The market impact was muted however, as many of the indicators used in this calculation have been released previously.

Two speeches from ECB President Draghi were seemingly shrugged off by the euro, which also pared earlier losses caused by investor concerns over the breakdown of German coalition talks. Also released were the Reserve Bank of Australia monetary policy minutes, which caused no major surprises but struck a subdued tone, causing slight weakness for the Aussie dollar.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1295 1.1451 1.1092 3.14%
GBP / USD 1.3261 1.3321 1.3039 2.12%
EUR / USD 1.1740 1.1858 1.1553 2.57%
GBP/AUD 1.7579 1.7584 1.6852 4.16%
GBP / NZD 1.9491 1.9501 1.8787 3.66%
GBP / CAD 1.6991 1.7171 1.6589 3.39%

Today's Market Highlights

The subdued theme to the macro calendar continues today with very little in the way of hard economic data for markets to focus on. Sterling traders will pay keen attention to the Inflation Report Hearings, beginning at 10AM, with 4 MPC members testifying to the Treasury Select Committee. Traders will be watching for any hints regarding future monetary policy in the UK. Hawkish comments would likely see some demand for the pound.

Also of note in terms of central banks are speeches from Reserve Bank of Australia Governor Lowe (9AM) and Fed chair Yellen speaking at 11PM. Neither speech is explicitly on the subject of monetary policy, however volatility is to be expected for both the Aussieand US dollar during these speeches.

The North American session sees little in the way of data, with only the Canadian Wholesale Sales data (m/m forecast 0.6%, previous 0.5%) and US Existing Home Sales (forecast 5.42M, previous 5.39M) of note.