FX Update: The dollar majors have been trading narrowly
FX Update: The dollar majors have been trading narrowly so far today. The pound has been consolidating after rallying yesterday as markets were tantalized by the prospect of a Brexit deal, which had until last week looked like a remote possibility. Cable posted five-month peak at 1.2800 just after the London fixing, subsequently correcting to the lower 1.2700s before turning back higher, with the bid presently at 1.2776. The EU had set a deadline of midnight yesterday for a draft of the deal to be legally documented, but that looks to have come and gone. Prime Minister Johnson's official spokesman said that "talks remain constructive but there is more work still to do," and negotiations will be continuing today with the aim of having a deal agreement before the EU's summit tomorrow. Reports confirmed that Johnson has made the big concession on the Irish border, going where former PM May wouldn't by agreeing to plant a customs union down the Irish Sea, separating Northern Ireland from the rest for the UK with regard to customs. A lot of moving parts remain in play. If a deal is agreed, which still remains an "if" albeit with the odds looking good, Johnson will then have to sell it to Parliament and the public. Whether Johnson will have sufficient support for the deal is uncertain at this stage, while the opposition will push for a "confirmatory" referendum, aka a "peoples vote", which would give the public a choice between Brexit with the deal agreed and remain. Elsewhere, the euro is trading buoyantly given the prevailing Brexit positivism, with EUR-USD making a new high for the week, at 1.1060, and EUR-CHF holding near recent highs. USD-JPY posted a fresh 10-week high at 108.89 during the NY afternoon session yesterday.