British Pound Tries to Recover as Theresa May Seeks to Save Brexit Deal

Market Reviews

On currency markets, Australian dollar is the strongest one for today, followed by New Zealand dollar. US dollar is trading as the weakest one, followed by Canadian dollar and Japanese yen. British pound is trying to recover, but the currency stays weak. The next pound’s move will depend on the result of UK Prime Minister Theresa May’s meetings with European Council President Donald Tusk and European Commission President Jean-Claude Juncker.

On stock markets, FTSE added 1.88%, DAX increased 2.12%, CAC gained 2.15%. Earlier in Asia, Nikkei dropped 0.34%, Hong Kong HSI rose 0.07%, China Shanghai SSE added 0.37%, Singapore Strait Times dropped 0.43%.

British Prime Minister stated she would look for further guarantees and ways to give British lawmakers authority over the Irish border. The representative of the parliament said that the British parliament will hold a vote on the deal until January 21.

European Commission President Jean-Claude Juncker said ahead of the meeting with Theresa May that, “the deal we achieved is the best possible. It’s the only deal possible. There is no room whatsoever for renegotiation.” Nevertheless, he added “there is room enough to give further clarifications and further interpretations without opening the withdrawal agreement”. But he reiterated that “the withdrawal agreement will not be reopened.”

Today’s data showed, that UK unemployment rate was unchanged at 4.1% in the three months to October, matched expectation. Average weekly earnings including bonus rose 3.3% 3moy, above expectation of 3.0% 3moy. Average weekly earnings excluding bonus also rose 3.3% 3moy, above expectation of 3.2% 3moy.

It was also reported, that German ZEW economic sentiment improved to -17.5 in December, up from -24.1, better than expectation of 025.0. Current situation index dropped to 45.3, down from 58.2, missed expectation of 55.6. Eurozone ZEW economic sentiment improved slightly to -21.0, up from -22.0, and beat expectation of -23.2. Eurozone current situation dropped -6.1 to 12.1.

US economic data showed, that headline PPI slowed more than expected to 2.5% yoy in November. But core PPI surprised on the upside and accelerated to 2.7% yoy.