US Tax Bill in Focus; GBP Softer on Brexit Uncertainties

The US tax bill remains in focus. The pound saw pressure yesterday on Brexit uncertainties and will watch Carney comments today.

Previous Day's Market Highlights

Sterling softened yesterday as a quiet data calendar left attention on remaining Brexit uncertainties and as Barnier said there would be no bespoke deal for the financial services sector. The dollar had a limited reaction to the Senate’s passing of the controversial tax bill, which now goes to the House.
 
GBP/EUR briefly dipped below 1.13 and GBP/USD fell towards 1.33 after meeting resistance around 1.34. Mixed US data saw Housing Starts pick up more than expected but Building Permits slow. The market impact was limited.  
 
The kiwi weakened as Current Account and trade deficits came in wider than forecast.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP / EUR 1.1303 1.1509 1.1133 3.27%
GBP / USD 1.3385 1.3550 1.3212 2.49%
EUR / USD 1.1841 1.1961 1.1717 2.04%
GBP/AUD 1.7458 1.7999 1.7363 3.53%
GBP / NZD 1.9198 1.9836 1.9080 3.81%
GBP / CAD 1.7211 1.7468 1.6843 3.58%

Today's Market Highlights

Brexit headlines and the US tax bill will remain in focus amongst a relatively light calendar day. BoE Governor Carney will testify before the Treasury Select Committee on the Financial Stability Report from 13:15 GMT. Markets will interpret the comments for any hints as to the future of monetary policy, and focus on risks, particularly from Brexit, could weigh on the pound. Otherwise, the testimony may have limited market impact.
 
In the afternoon, the US releases Existing Home Sales (15:00 GMT), which typically has a limited effect on the dollar, and Canadian dollar traders will keep an eye on Wholesale Sales and US EIA Crude Inventories (13:30, 15:30 GMT).
 
Overnight, slower economic growth in Q3 may weigh on the kiwi dollar.

Today's Economic Calendar

Time Currency Release Consensus Previous
13:00 EUR German Buba President Weidmann Speaks
13:15 GBP BoE Governor Carney Speaks
13:30 CAD Wholesale Sales MoM (Oct) 0.5% -1.2%
15:00 USD Existing Home Sales MoM (Nov) 5.52M 5.48M
15:30 USD EIA Crude Oil Inventories (15 Dec) -3.769M -5.117M
21:45 NZD GDP QoQ (Q3) 0.5% 0.8%
21:45 NZD GDP YoY (Q3) 2.3% 2.5%
00:01 GBP Gfk Consumer Confidence (Dec) -12 -12