EUR/GBP Bounces on Catalan Talks; UK's Hammond and ECB's Praet Ahead
- Catalonia’s decision to wait before declaring independence from Spain has taken the heat out of the situation in the short-term.
- What will UK chancellor Hammond and ECB chief economist Praet have to say?
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EUR/GBP continues to pull back its recent losses, aided by a temporary cessation in Catalonia’s push for independence. Late Monday, Catalan President Carles Puigdemont pulled back from calling for unilateral independence from Spain, in the short-term, leaving the way open for further discussions with the Spanish PM Mariano Rajoy. However Rajoy is likely to remain firm that Catalonia’s independence referendum was illegal and that Madrid could still impose direct rule over the semi-autonomous region.
And ahead, the UK Chancellor of the Exchequer Philip Hammond is scheduled to appear before the Treasury Select Committee at 08:45 GMT. Hammond, a staunch remainer, will likely be asked about the government’s preparations for Brexit, especially after UK PM Theresa May revealed recently that the UK is making contingency plans for leaving the EU without any trade agreements.
And later in the day (17:50 GMT), ECB chief economist Peter Praet will address a conference in New York on ‘European Exit Strategies’ with market participants keen to garner any news on the ECB’s plans for quantitative tightening. Praet has hinted over the recent weeks that he thinks that the market still needs a substantial degree of stimulus and that qe may need to be tapered at a slower pace.
On the charts, EURGBP needs to break back above the 0.89930 level to continue its recent pullback, while the 0.87500 region should provide a strong level of support.
Chart: EURGBP Daily Timeframe (June 11 – October 11, 2017)
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--- Written by Nick Cawley, Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.