Pound Higher After Davis Resignation
The Pound Sterling was higher against the US Dollar on Monday as FX traders decided that the resignation of the government minister assigned to all things “Brexit” would likely not endanger Theresa May's position. Instead, markets focused on that latest plan from the UK government that are more likely to ensure a “soft” Brexit. The UK news reported that David Davis had resigned because he did not want to be complicit to the Prime Minister's Brexit agreement which, he claims, would give the European Union too much power. FX traders see Davis' resignation as the removal of a hurdle to the Prime Minister's ability to negotiate with Brussels.
As reported at 11:02 am (BST) in London, the GBP/USD was trading at $1.33, up 0.34% and off the session peak of $1.3363; the low for the trading day is currently recorded at $1.3285. The EUR/GBP is trading at 0.8826 Pence, a loss of 0.16%; the pair has ranged from 0.88110 Pence and 0.88496 Pence.
Markets Eye Draghi's EU Speech
In Brussels, the President of the European Central Bank, Mario Draghi, is due to testify in front of the European Parliament's Committee and Economic and Monetary Affairs. FX traders will be watching the speech closely for any sort of hawkish shift from Draghi, which could mean higher volatility for the EUR/USD and EUR/GBP. At the very least, markets will be keen to hear the ECB's plan for forward guidance as regards interest rate adjustments. The EUR/USD is currently trading at $1.1769, a gain of 0.20%; the pair has ranged from $1.17400 to $1.17814 in today's session.