Though encouraging signs have crept into the negotiations between the European Union and the British government, FX traders are still wary that the trade issue surrounding the Irish borders will continue to be a sticking point that could derail the process. As such, they sat on the sidelines until there is clear evidence that a Brexit deal is in the cards in the short term. Michel Barnier, the negotiator for the EU, said earlier yesterday that more than 80% of the deal has already been agreed, but the worry is the remaining terms.
As reported at 11:20 am (BST) in Tokyo, the GBP/USD was trading higher at $1.32, a gain of 0.04%; the pair moved off the earlier trough of $1.3182 while the session peak is recorded at $1.3244. The EUR/GBP is trading at 0.87624 Pence, up 0.34%; the pair has ranged from 0.87301 Pence to 0.87648 Pence in today’s trade.
US CPI in Focus
Later today, markets’ attention will turn to the US where the US Department of Labor Statistics will release the figures for September’s personal inflation. Analysts and economists are predicting that Core CPI will have increased to 2.3% (year-over-year) from 2.2% in the previous reading; Core CPI removes fuel and food from its components. September’s Consumer Price Index is predicted to to have fallen to 2.4% from 2.7% (year-over-year). Markets are anxious to see what the inflation trend might have on the Federal Reserve in its call for additional monetary tightening.