Quiet Monday for the Pound

Monday’s trading was an extremely quiet day for the Pound as rates consolidated within just a 0.3% range against most majors, finishing the day marginally lower than the market open on Sunday night. With no data out there was little reason for the pound to further continue its recent upward trend, where traders having been largely pricing in an increasingly probable extension to Article 50 next month. This speculation however continued overnight with rumours that Labour is ready to back a second referendum and put extra pressure on Theresa May to remove ‘no deal’ off the table. This means GBP/EUR is now trading at an 18 month high giving an excellent opportunity to secure your rate amidst this speculative positioning.

Today the news will start to flow again with a statement from Theresa May to update on the progress of Brexit negotiations ahead of another day in parliament tomorrow when key new amendments will again go to the vote once again. Theresa May will then bring her deal back to parliament on March 12th for a second meaningful vote. In another quiet week for UK eco-stats it will be Brexit sentiment that continues to drive Sterling markets.

Elsewhere however Dollar markets are now thought to be in a “hyper-data dependence mode” with regards to future monetary policy and as such in contrast to the Pound, we are likely to start seeing greater volatility around key data releases as markets speculate on the greater impact of rate hike timings over the next 1-2 years. Testaments this week from Fed Chair Powell will be watched closely along with Thursday’s revised GDP figure.