06/09/2018 - Sterling Rallies On Reduced Brexit Demands

GBP

Sterling rose against the dollar and the euro on Wednesday after reports British and German governments had abandoned key Brexit demands, potentially easing the path for Britain to strike a deal with the European Union.

The press quoted people familiar with the matter as saying that Germany would be ready to accept a less detailed agreement on Britain’s future economic and trade ties with the EU in a bid to get a Brexit deal done. This news also follows positive data for the UK Services sector with the PMI figure being printed at 54.3 against a previous of 53.5.

The UK was also willing to settle for a vaguer statement of intent on the future relationship, postponing some decisions until after Brexit day, according to an official quoted in the report.

Speculators’ net short position on the British pound stood at 76,928 contracts, the most bearish on sterling since May 2017, Commodity Futures Trading Commission data showed.

Key Announcements

13.15 – USD: ADP Non-Farm Employment Change; 195k against previous of 219k
15.00 – GBP: ISM Non-Manufacturing PMI; Forecast 56.8 against previous of 55.7