Sterling jumps as Brexit headlines filter through thick and fast…
Tuesday afternoon witnessed an almost 1 cent spike higher in the GBPUSD pair as rumours crossed wires that the EU were willing to offer the UK a significant concession. It related to the Irish backstop and was in particular reference to capping its duration, essentially placing a time limit on it. This would be a big step forward in solving the thorny issue of the backstop, as a result, the pound reacted with a sharp move to the upside.
Yesterday saw a major headline from across the pond relating to the US manufacturing sector. Their latest ISM reading printed at the worst levels in over 10 years! Manufacturing activity throughout the country has been hit by lingering trade tensions, increasing talk of a stronger and more broad based economic slowdown in Q4 2019. The market’s response was to hammer global stock indices as well as sell the greenback. The buck saw losses across the board as potential for further Fed rate cuts increase.
Today sees Boris Johnson’s speech at the Conservative Party Conference (midday). All eyes are on this for any new detail regarding Brexit. Additionally, UK construction PMI and US ADP employment data will be monitored on the economic front.
Written by Viv Savani. 9:34am, October 2nd 2019
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