Awaiting the potential publication of the draft text of a Brexit agreement, one that the UK and EU are reportedly very close to reaching, the pound had a wobble at Wednesday’s start.
It is crunch time, something sterling is more than aware of. Though the astounding gains it has made in the last handful of sessions are effectively intact – at present, anyway – the currency nevertheless stumbled out of the gate. Against dollar and euro alike it sank 0.6%, taking it back under $1.271 and €1.151.
Wednesday might bring with it the latest UK inflation data – expected to nudge up from 1.7% to 1.8% month-on-month – but like with Tuesday’s jobs figures, they might get lost in the fray as the pound prepares itself for the next Brexit steps.
The FTSE can’t catch a break at the moment. Despite the pound opening in the red, the UK index was unable to avoid a fall of its own, even if its losses only amounted to 15 or so points. The overall mood on the markets was muted – the DAX and CAC slipped 0.2% and 0.4% respectively – in large part because of new tensions between the US and China just days after the announcement of a ‘partial trade deal’.
Last night the House of Representatives passed the Hong Kong Human Rights and Democracy Act, one that, if successful in the Senate, would see the US end its special trading status with Hong Kong if the city’s authorities were deemed to have reached human rights and the rule of law. It is safe to say Beijing weren’t best pleased with this development, warning it would take strong measures to retaliate.
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