It has been a very quiet start to the week in FX markets, with major currencies largely stagnant. A meeting yesterday between US President Trump and Fed Chairperson Powell appears to have been surprisingly free of controversies while the majority of FOMC members agree that the Fed’s policy rate is currently appropriate.
Sterling has been well behaved ahead of this evening’s televised debate between British Prime Minister Johnson and the leader of the opposition, Jeremy Corbyn. With the general election due in 3 weeks time, this debate could prove pivotal. In trade-weighted terms Sterling has very slowly inched out its very narrow 0.8% range in place since mid-October and is now trading at its strongest level since early May, with markets seemingly increasingly confident that the ruling Conservative Party will increase its number of parliamentary seats and get a Brexit deal approved.
