The pound has recovered across a basket of currencies as reports of a shift in tone in the talks between the Labour party and UK government surface. An unnamed senior Labour party member reported that the tone of talks had changed significantly and progress is being made. The pound moved higher against the dollar to a two week high.
The Prime Minister is still under significant pressure as reports suggest the Tory party will look to oust the PM over the summer and force a leadership vote within the party. This would ultimately result in another extension to Article 50, as a new leader works out their own Brexit strategy.
The euro is stronger today after some positive economic data from Germany and therefore solid composite numbers for the EU. The German unemployment rate remains at 4.9% and this translated into an EU unemployment rate of 7.7% - this is below the previous reading of 7.8%. The EU GDP growth number was reported above the expected number and above the previous reading, showing the EU economy had grown 1.2% in the first quarter of 2019. The euro moved circa 0.5% higher against the US dollar through the day.
The US dollar has lost ground against both the pound and euro as the market eyes the FOMC meeting. The dollar weakened after US President Donald Trump urged the FOMC to lower interest rates in order to “rocket” the US economy to new heights. The market however is currently only pricing in a 1.9% probability of rates being cut.
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