The pound rallied yesterday and is up sharply this morning. A report in the Telegraph claimed that the UK and the EU have agreed to the size of the 'Brexit bill'. According to the story, the final bill will be between 45 and 55 billion euros. The pound began its ascent shortly after the story was published. While the report was denied by a British government official who remarked that he "did not recognise this account of the negotiations", the pound has continued to rally this morning. As we wrote yesterday, expectations are rising ahead of the EU's upcoming summit in December. Our outlook on the pound remains bullish.
GBP/USD is currently just above 1.340. EUR/GBP is down today and the pair is currently trading above 0.8840. The pound is up against both the Australian dollar and the Canadian dollar. GBP/AUD is above 1.7680, while GBP/CAD is just above 1.7190.
This is a fairly light week for economic data relating to the pound. Earlier today, the BoE's Financial Stability Report suggested that British banks were ready in the event of 'hard Brexit'. However, RBS and Barclays are likely to be the weakest in the event of significant volatility. Later today, we'll see consumer credit and mortgage approvals. On Thursday, we'll get consumer confidence. Finally, on Friday we'll see Markit manufacturing PMI. Last week, the Autumn Forecast Statement suggested a weak outlook for future economic growth.