oncerns regarding progress on US and China discussions were once again the main driver for the move, as were jitters surrounding the ongoing impeachment inquiry towards President Trump. According to a Financial Times report released on Thursday afternoon, both parties were struggling to reach an accord over the ‘phase one’ trade deal before the 15th December, when the next round of tariffs are set to take place.

Comments from White House economic advisor Larry Kudlow were, however, much more upbeat, saying that a deal was ‘getting close’. Given the raft of contrasting headlines the market has been bombarded with in the past few months, we take most of these reports with a grain of salt and await more concrete news of a signing of the deal – we still expect to be completed before the new tariffs take effect.

A host of economic data releases in the US have the ability to shift the greenback today. Retail sales and industrial production numbers will be the main ones to look out for. These should give us a decent indication as to how the US economy is performing going into the final quarter of the year.

Investors eye opinion polls ahead of UK election

Thursday’s move upwards in sterling was largely a result of dollar weakness rather than anything else, with the pound mostly unchanged versus the euro.

With no major headlines to digest its been a pretty quiet 24 hours or so for the UK currency, particularly by recent standards. Investors are clearly biding their time ahead of the 12th December election. As tends to be the case, opinion polls leading up to the vote will now take on added importance for the currency markets. At present, the Conservative Party have an approximate 10% advantage. Should this lead narrow and the chances of a hung parliament increase in the coming weeks, we may see a bit of sterling weakness going into the election.

With yesterday Eurozone growth numbers coming in bang in line with expectations, attention in Europe now turns to this morning’s inflation data. This is, however, expected to remain unrevised from the initial estimate that showed headline inflation at its lowest level in three years. Aside from any surprises here, we think that the common currency is likely to be driven largely by news elsewhere, primarily headlines out of US-China trade progress.