Carney

For today’s most important data releases, the outcome was even worse than expected.

A growth surprise is helping sterling shrug off increasingly ferocious parliamentary battles

Currency markets have been dominated by the latest Brexit dramas

Sterling bulls were dealt a big Halloween treat around today’s European close, when UK Brexit Secretary Dominic Raab noted that he expects an agreement on Brexit to be finalized on November 21.

Another day in Europe is coming to an end, and those who like volatility were not left disappointed with the euro and pound making sharp moves as speculators responded to fresh rumours and comments from central bank officials.

Sterling dropped sharply on Tuesday after Bank of England Governor Mark Carney suggested in a speech that a BoE rate hike would probably not be coming anytime soon. These comments contradicted last week’s hints by the central bank that rising inflation pressures in the UK might prompt some near-future policy tightening. In his speech, Carney cited concerns about the future impact of Brexit on the UK economy. The BoE Governor gave indications that there was no rush to raise rates, just as formal Brexit negotiations have officially begun this week with UK Prime Minister Theresa May in a much-weakened negotiating position.

Earlier, data from the ONS showed consumer price inflation in the UK rose to its strongest level in nearly three-and-a-half years to 2.3%. The pound’s reaction was swift. The GBP/USD jumped to 1.2470 while the EUR/GBP slumped to 0.8655. The GBP has since eased back a little but remain near the day’s highs, which suggest more gains are likely.