It is a historic day of the pound as Theresa May presents her Brexit deal to Cabinet ahead of a parliamentary vote. Cabinet approval is far from certain ahead of what is likely to be a shaky parliamentary vote. On the optimistic side, even if the cabinet reject the proposal, there may well be further room for negotiation with European partners. One thing is certain though, recent Brexit enthusiasm is tentative at best. The GBP/USD is on the back foot after huge gains yesterday, while the GBP/JPY is unchanged after rallying to recover yesterday’s opening gap lower. The EUR/GBP reversed sharply yesterday, sitting firmly below 0.8700.
The euro reversed well along with other dollar pairs yesterday, but the EUR/USD is also on the back foot this morning. The EUR/JPY is following suit, with the pair reversing a small part of yesterday’s solid gains.
The AUD/USD had a solid day yesterday, reversing all of Monday’s losses, but there is a small reversal this morning.
The USD/CAD is holding at the highs, as oil prices continue their dramatic reversal with a large fall yesterday.
The USD/CHF reversed from the highs yesterday, but still remains well above the parity line.
The USD/JPY is higher for the second straight day as November’s mini rally keeps up.
German Preliminary GDP is at 07.00.
UK CPI is at 09.30, released alongside PPI and RPI.
European GDP is at 10.00.
US CPI is at 13.30.
FOMC member Quarles speaks at 15.00.
Fed Chair Powell speaks at 23.00.
There is every chance that Theresa May will have a rough ride with her Cabinet today, especially from her DUP colleagues. We could well therefore see a short term reversal in the pound as the final negotiation points are hammered through with European partners.