The pound remained steady on Wednesday, close to a six-week high against the dollar that it reached on Monday as investors considered whether Boris Johnson could strike a deal with the EU before October 31st. By the middle of the afternoon the pound was down 0.1% against the dollar however it was up 0.3% against the euro. An additional boost has come this week from positive economic data.
Volatility gauges have suggested that while parliament remains closed, there will be relative calm with more “stressful” periods ahead during October and November alongside a general election campaign. Markets appear to have ignored, for the moment, news of a Scottish judge ruling the suspension of parliament as unlawful and the release of government documents pertaining to specific details of how a no-deal Brexit could be harmful to the UK economy.
GBPUSD opened at 1.2361 and began dropping steadily around midday to close at a low of 1.2322
GBPEUR in contrast opened at 1.1199 and climbed steadily to mid-afternoon high of 1.1224 before dropping back down to close at 1.1196
The euro fell to a one week low against the dollar a day before the ECB is expected to announce a rate cut and other stimulus measures. The euro was down 0.34% against the dollar but some analysts believe tomorrows announcement might lead to a jump in the euro as the aggressive nature of the stimulus package might have been overestimated.
Elsewhere the prospect of Chinese and US trade talks has continued to reduce demand for safe-haven currencies, the dollar gained 0.22% against the Japanese yen. US price inflation data is expected later today, and retail sales data is expected on Friday.
EURUSD opened at 1.1038 and fell steadily to an afternoon low of 1.0990, recovering only slightly to close at 1.1006