Sterling swings about
Sterling swung about yesterday in line with developments in Brussels. It hit an intra-day high of around 87.5p against the euro in the morning when it looked liked the EU and the UK had reached an agreement on the Irish Border issue, but lost ground again when the agreement fell through, falling to well over 88p
Discussions on the Border issue will continue over the coming days and both sides (EU and UK) say there can be a positive outcome ahead of next week’s EU Council meeting , so we’ll have to wait and what transpires. In the meantime, sterling may continue trading in the range of around 87.5p to 90p it has been in for the last while
US bond yields continue to edge up after the Senate passed its tax reform bill over the weekend and ahead of an expected Fed interest rate hike at its December 12/13 meeting. The market has also upped the number of rate hikes it expects next year to two 25bps increases
The euro remains off its best levels of last week against the dollar of close to $1.1950 and is trading about a cent lower this morning at $1.1850
Data due today include services PMIs in the UK and the Euro area, and the trade balance in the US