The Pound Sterling finally took a break from the recent free fall but FX traders remain clearly anxious that Britain might wind up without a Brexit agreement on March 29, 2019. The slide, which began early on Thursday after the news of the resignation of two prominent members of Theresa May's party, had refused to ebb until recently. The concern is that the departure of these two key players may be the tip of the iceberg and that more party members might be unwilling to work with Ms. May to push through her proposal. If the Prime Minister is unable to secure Parliamentary approval, Britain would be left without the benefit of a safety net. The challenge to Theresa May's leadership, the prospect of a hard Brexit and the possibility of slowing economic growth have all conspired against the Pound.
As reported at 11:08 am (JST) in Tokyo, the GBP/USD was trading at $1.2789, up 0.12% and moving away from the earlier trough of $1.2761. The GBP/JPY was trading at 144.999 Yen, up 0.01%; the pair has ranged fro 144.878 Yen to 145.326 Yen.
Mario Draghi and EU CPI in Focus
Looking to later today, markets will focus on the release of inflation data for the Eurozone. At present, the latest poll suggests that October's CPI and Core CPI will be stagnant on a year-over-year basis for the period, at 2.2% and 1.1%, respectively. Before then, however, Mario Draghi, as the keynote speaker will be addressing the European Banking Congress in Frankfurt. Mr. Draghi will likely be discussing the pulling back of the quantitative easing efforts the ECB has embarked on over the past several years and the governing council's outlook as regards inflation and interest rates.