Dollar generally firmer

The dollar is generally firmer, nudging higher on a trade-weighted basis since the end of last week, supported by the near certainty of an interest rate hike next week, the prospect of further increases to come, and the increasing likelihood of a fiscal stimulus (via tax cuts) next year. The US currency is trading just below $1.18 against the euro this morning

Sterling remains off its best levels of the week recorded on Monday, trading at over 88p this morning, as the market awaits developments in relation to Brexit and particularly the Irish Border issue. Theresa May said in parliament yesterday that  the UK ‘will ensure that there is no hard border between Northern Ireland and the Republic of Ireland (and) we will do that while we respect the constitutional integrity of the United Kingdom’. This language may provide the basis for a ‘formula of words’ that might move the Border issue towards a successful conclusion

In bond markets, US government yields edged lower again, with both 2- and 10-year yields falling by around 3bps. Meanwhile, equities in Europe and the USD ended marginally lower on the day

ECB member Mersch says the central bank must be careful not to pre-commit too far into the future in relation to monetary policy, given that economic conditions can often change unexpectedly

Data due today include a breakdown of third quarter GDP in the Euro area and jobless claims in the US