Sterling Volatile amid Brexit Uncertainty, Disappointing Data

The Great Britain pound was extremely volatile today, sinking intraday but bouncing later. Currently, the sterling is trading above the opening level. The main reason for the currency’s volatile moves was uncertainty over the Brexit, though today’s mostly underwhelming macroeconomic data also had its negative impact on the pound.
Initially, markets felt optimistic about the chances for a Brexit deal as it seemed that the United Kingdom and the European Union were getting closer to an agreement. But optimism has started to fade after Northern Ireland’s Democratic Unionist Party voiced concerns about the possibility that Northern Ireland will remain in the EU customs union under the agreement. The EU wants to avoid a hard border on the Irish island, a problem that can be avoided by keeping Northern Ireland in the customs union. But the DUP said it does not want to see Northern Ireland to be treated differently from the rest of the United Kingdom and to have customs checks between the UK and NI.
As for macroeconomic data, Britain’s Office for National Statistics reported that the Consumer Price Index rose 1.7% in September, year-on-year, the same as in August. But markets were disappointed as analysts had promised a bit faster growth by 1.8%. The input Producer Price Index fell 0.8% in September from the previous month, whereas specialists had promised an increase of 0.2%. The output PPI fell 0.1% instead of staying unchanged as forecasters had promised. On a positive side, a government report revealed that the House Price Index rose 1.3% in August from a year ago, exceeding the average forecast of a 0.9% increase.
GBP/USD rose from 1.2780 to 1.2843 as of 13:59 GMT today, trading near the highest level since May 16, after falling to the daily low of 1.2657 earlier. EUR/GBP declined from 0.8629 to 0.8607, retreating from the session maximum of 0.8715 and trading near the lowest level since May 8. GBP/JPY edged up from 139.09 to 139.70 — the highest since May 22.

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Original from: www.earnforex.com