Sterling Falls As May And Juncker Failed To Deliver

On Monday, Sterling fell from a six-month high of 1.3549 against the US Dollar after hopes that the first phase of Brexit talks would reach a conclusion were dashed during a press conference in Brussels. Progress was shattered by a lack of agreement with Northern Ireland’s Democratic Unionist party. Juncker told reporters that despite significant development during May’s visit to Brussels, two or three open issues remained and “it was not possible to reach a complete agreement”. However, he added: “this is not a failure, this is the start of the next round” and expressed optimism that a successful outcome would be reached as talks would resume later this week.

On Tuesday, Gold prices held within a tight range in Asian trade supported by a slightly weaker Dollar as investors awaited the next steps over US tax reform legislation. The precious metal has been range bound for the past two months, with some investors seeking a hedge against risks including a deepening probe into contacts between the Trump administration and Russian officials. Markets are now looking ahead to the upcoming US non-farm payrolls report this week which would be the last employment report before the Fed’s monetary policy meeting next week.

Meanwhile, the Australian Dollar surged against the US Dollar after the release of better than expected domestic retail sales data in October, rising 0.5% and beating expectations of a 0.3% increase. The Reserve Bank of Australia said it sees inflation quickening as it left its cash rate at a record-low 1.5% for a 15th straight meeting.