Sterling was on a rampage yesterday after some hawkish comments from a Brexit MP and the President of the Eurogroup. The currency jumped higher when Brexit Secretary David Davis made comments about the Government, who is prepared to consider paying for the UK to access the European single market. The news has lessened concerns amongst UK businesses as to what kind of trading relationship they could expect once Article 50 has finished. Shortly after Eurogroup President and Minister of Finance Jeroen Djissenbloem aided the Sterling rally by saying the EU may find a way to maintain UK access to the internal market. The Sterling climbed over 1% against the Euro and Dollar after the news.
The economic calendar was extremely busy yesterday as we had high tier data from the UK and US. Firstly, UK manufacturing PMI failed to meet economists’ consensus, registering a 53.4, a three-month low. However, the figure was above 50, indicating expansion and the data fell on deaf ears as the comments made by David Davis dominated price action. In the afternoon, the US continued their good run of form registering a better than expected 53.2.
As always, with the first Friday of the new month the US labour data comes into the limelight. The release of the all-important Non-Farm employment figure will again be looked into for more evidence to see if the Fed will pull the trigger on December 14. Unemployment is expected to remain at 4.9%, but average earnings on the month is likely to show a decrease to 0.2% from 0.4%. Construction PMI from the UK is posted in the morning and is forecasted to remain in expansion territory.