UK politics continues to be the main Sterling driver. We saw Sterling tick higher against the majority of its counter parties, after Theresa May’s closest rival Andrea Leadsom dropped out of the race to become Prime Minister. Theresa May is to be sworn in this evening, which has removed the political uncertainty that loomed over the past month. GBP/USD remains above a key psychological level, however if murmurs continue in the background of a general election we could see this struggle to hold.
Bank of England Governor Mark Carney, appeared before the UK Treasury select committee yesterday. Carney made it clear that UK households and businesses will not be short of credit for the right mortgages and business ideas. Movement during this event was relatively subdued as markets await Thursday’s MPC meeting, where the possibility of a rate cut remains strong.
The global commodity market will be the focus of today with key readings from Canada, a key commodity exporter, and China the preeminent consumer.