Sterling extended its short-term recovery against the EUR and remained steady against the USD on Wednesday, as investors continue to hope a ‘no deal’ Brexit can be avoided on the 31st October….
Support for the GBP stemmed from a ruling by a Scottish court that the Government acted unlawfully when they prorogued Parliament on Monday.
This was a surprising outcome, as the initial decision last week ruled in favour of the Prime Minister.
An appeal will begin next week in the Supreme Court to achieve a final ruling. If the government are found to have unlawfully prorogued Parliament, we could see Parliament reconvene as soon as next week.
German Chancellor, Angela Merkel, also mentioned on Wednesday that the UK still has every chance of leaving the EU with a deal at the end of next month, and that the German government will do everything it can to make it possible – right up to the last day.
The EUR fell to a one week low against the USD and a six week low against the GBP on Wednesday, as markets prepare for Thursday’s ECB meeting.
The European Central Bank are expected to add further stimulus in a bid to boost the region’s economy.
It has been reported that ECB policymakers are considering a revival package that includes a rate cut, a promise to keep rates low for longer and compensation to bank due to any side-effects of negative rates. Should the ECB not live up to markets dovish expectations this week, we could see a rebound in the EUR.
07:00 – EUR – Harmonized Index of Consumer Prices (YoY) (Aug).
12:45 – EUR – ECB Deposit Rate Decision.
12:45 – EUR – ECB Interest Rate Decision.
13:30 – EUR – ECB Monetary Policy Statement and Press Conference.
13:30 – USD – Consumer Price Index ex Food & Energy (YOY) (Aug); expected to rise to 2.3% from 2.2%.
13:30 – USD – Consumer Price Index ex Food & Energy (MOM); expected to fall from 0.3% to 0.2%.
Source : ETFWorld.co.uk