Gains for the Pound were, however, tempered yesterday as investors continued to fret over the brewing political crisis in Ireland, which has done little to improve sentiment towards the currency given its implication for the Brexit discussions. Ireland’s prime minister and opposition leader resumed efforts in order to avoid a snap election in the country yesterday following a long-running police whistleblowing scandal involving the deputy PM Frances Fitzgerald.

This week is a very data light one in the UK, with no significant economic announcements on the docket until Friday’s manufacturing PMI release. Politics continues to be the main driver in the UK and is likely to remain so right through to the next meeting of the European Council on 14th-15th December.

Busy week of US central bank speeches, economic data

The EUR/USD rate ending London trading almost exactly where it began it yesterday as investors eyed a busy week of economic data releases and central bank speeches.

The Euro had very fleetingly rallied to its highest level in just over two months versus its US counterpart as traders braced for the resumption of deliberations on the US tax plan and the confirmation hearing of Jerome Powell as the next FOMC chair. The Euro’s retracement was largely driven by technical factors rather than any fundamental news. Economic news that we did receive was mostly US Dollar positive. US new home sales were particularly pleasing, jumping by 6.2% in October to its highest level since 2007 after investors had eyed a negative reading.

Donald Trump’s Treasury Secretary Steve Mnuchin is scheduled to speak this afternoon, kicking off a hectic few days across the pond. Federal Reserve members Powell, Dudley and Harker will all be speaking at various events in the US today. However, with financial markets currently pricing in north of a 90% chance of another interest rate hike from the Fed at the central bank’s next monetary policy meeting in December, it would take a dramatic shift in tone from policymakers to persuade the market higher rates will be delayed until 2018.