EU leaders ready to give Barnier mandate to close Brexit deal



Sterling hit a three week high versus the Euro on Friday (GBP/EUR at 1.1211) after EU Brexit Minister Barnier struck a notably more conciliatory tone on Brexit negotiations. There has also been reports over the weekend that the EU are preparing to give Barnier a mandate to get a deal done. Reaction to this morning’s data has been muted meanwhile as stronger monthly GDP data was counteracted by soft industrial production.

Looking ahead, the Bank of England meet on Thursday and are widely expected the leave the Bank Rate on hold.


The Dollar Index is little changed this morning at around 95.35, holding on to gains posted on Friday post-payrolls after average hourly earnings surprised to the upside. The threat of another escalation in the US-China trade spat does not appear to have dented demand despite Trump’s warning that they have another prepared $267 Bln in tariffs on addition to the $200 Bln already being considered.

On the data front this week, PPI and CPI are out on Wednesday and Thursday respectively while retail sales, industrial production and Michigan Sentiment follow on Friday.


The Euro has edged higher versus the Greenback this morning after hitting a three-week low on Friday at 1.1526. Losses occurred after a downward revision to second-quarter Euro Zone GDP although some technical selling was also touted as EUR/USD broke back below 1.16.

Looking ahead, the European Central Bank meet on Thursday where policymakers are widely expected to keep a steady hand. Data wise, German ZEW is out tomorrow, Euro Zone industrial production on Wednesday and wages on Friday.


USD/JPY is just about holding above 111 this morning having got down to a two-week low on Thursday at 110.38 as the Yen rallied in response to the Hokkaido earthquake. Demand for the perceived safe-haven currency was also boosted by Trump’s threat on Friday to double down on Chinese tariffs.

Looking ahead, BSI manufacturing and non-manufacturing figures are pout on Wednesday, PPI and machinery orders on Thursday and industrial production on Friday.


The Swiss Franc rose to its best level versus the Greenback since April last week at 0.9640, boosted by Thursday’s stronger-than-expected GDP data. The pair has bounced back since however and reclaimed the 0.97 handle this morning as gains in European equity markets limited demand for safe-haven assets.

Looking ahead, we await a quiet morning data wise with only PPI due on Thursday.


The Australian Dollar has inched higher versus the Greenback this morning but finished Friday as the G10 underperformer – AUD/USD slipped below 0.71 to its lowest level since February 2016.

Rising trade tensions continue to provide a weight with Trump suggesting on Friday they have another $267 Bln of tariffs prepared for China in addition to the $200 Bln already under consideration.

There were some positive for the Aussie Dollar however, including Wednesday’s stronger-than-expected GDP data. Looking ahead, NAB confidence indicators are out tomorrow followed by jobs data on Thursday.


The Canadian Dollar saw a volatile end to the trading week on Friday as investors were offered mostly encouraging NAFTA headlines and soft domestic jobs data. USD/CAD had pushed above 1.32 on Wednesday after the Bank of Canada made limited changes to their policy statement but is hovering just below this morning.

Looking ahead, a quiet week macro wise includes housing starts tomorrow and house prices on Thursday.


The New Zealand Dollar is flat versus the Dollar this morning although an overnight drop took it to its lowest level since February 2016.

The antipodean currency has hampered in recent weeks by rising trade tensions, notable between the US and China, with Trump doubling down with his threat of more tariffs on Friday.

Looking ahead, tariff actions remains in focus while FPI data is out on Wednesday and PMI on Thursday


Initial results from the Swedish elections over the weekend have been described as inconclusive as the Krona has made minor gains versus both the Euro and the Dollar this morning. Thursday’s Riksbank policy statement is also still fresh in investors’ minds as policymakers effectively ruled out an October rate hike and signalled they could hold off until next year. EUR/SEK has broken below 10.45 this morning to its lowest level since August 15th with policy developments in focus.

GDP figures are out on Thursday, followed by CPI on Friday.


The Norwegian Krone has begun the trading week as one of the strongest G10 currencies, boosted by stronger-than-expected inflation data – headline CPI rose +3.4% YoY in August, above expectations for a +3.2% gain.

EUR/NOK did trade up to a seven-month high at the end of last week at 9.8051 but has dropped as low as 9.7057 this morning.

Looking ahead, data releases are absent while the Norges Bank Regional Network Survey is out tomorrow.


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