The pound hits its highest against the Euro since June

GBP/EUR hit a new high since June. Brexit remains the key driver for the pound. Brexit Secretary Raab is expected to update MPs on negotiations.

Previous Day's Market Highlights

After ending last week on a more positive note, the pound was back under pressure as Brexit concerns returned to the forefront of market attention ahead of next week’s EU Summit. Prime Minister May’s spokesman said that he does not have a precise date for when the UK’s Irish backstop proposal will be published.
 
This sterling weakness combined with dollar strength pushed sterling-dollar lower towards 1.30 from late-Friday highs above 1.31. The euro weakened again on concerns over Italy’s budget and on the stronger dollar, pushing euro-dollar back below 1.15. Sterling-euro fluctuated within the 1.13-1.14 band before rising to break the key level overnight Monday for the first time since 22 June.
 
The pound also pulled back against the commodity currencies. Notably, sterling-kiwi pulled back nearly two cents from its first break of 2.04 since the EU Referendum.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1396 1.1402 1.1112 2.54%
GBP/USD 1.3077 1.3298 1.2922 2.83%
EUR/USD 1.1475 1.1815 1.1460 3.00%
GBP/AUD 1.8490 1.8624 1.7937 3.69%
GBP/NZD 2.0327 2.0423 1.9554 4.26%
GBP/CAD 1.6959 1.7190 1.6598 3.44%

Today's Market Highlights

It’s another fairly quiet calendar today, with central bank speeches occupying most of markets’ interest. Brexit remains the key driver for the pound, which could see some volatility this afternoon with Brexit Secretary Raab expected to update MPs on negotiations.
 
MPC Member Broadbent will be testifying on the use of the Retail Price Index before the Economic Affairs Committee (15:35). The Bank of Canada’s Senior Deputy Wilkins will be participating in a panel discussion on “Empowering Women in the Work Place”.
 
Fed Member Williams will be speaking at the Central Banking Forum in Indonesia overnight. Markets will watch for any new monetary policy insights, but with surprises unlikely, the immediate FX impact may be limited. Fed Member Evans will give the opening remarks at the Opportunity Finance Network and is not expected to speak on the economy or monetary policy.

Today's Economic Calendar

Time Currency Release Consensus Previous
9:30am GBP FPC Statement
1:15pm CAD Housing Starts s.a. YoY (Sep) 205K 201K
3:00pm USD Fed's Evans Speaks
3:35pm GBP MPC Member Broadbent Speaks
7:00pm CAD BoC's Wilkins Speaks
12:30am AUD Westpac Consumer Confidence (Oct) -3%
2:15am USD Fed's Williams Speaks
3:35am USD Fed's Williams Speaks

Caxton