After hitting a 16 month high of 1.6306 against the Dollar last Wednesday, Cable has proceeded to fall each following day – until now that is. GBP/USD is up this morning and currently trading at 1.6170 following the release of UK BBA Mortgage Approval data which showed a rise to 33.6K for November, up from 33.1K last month.
As expected, other than the UK Mortgage figures this morning, there is very little economic data due out today, with only US Consumer Confidence and US New Home Sales figures set to be released this afternoon. That said, despite the relatively slow day expected in the markets, meetings are due to take place in Washington that are gaining greater significance by the minute. President Obama cut short his Christmas vacation in Hawaii last night to fly home early in an attempt to add impetus to the negotiations regarding the on-going fiscal cliff dilemma.
It now appears unlikely that a comprehensive agreement will be reached regarding the fiscal cliff before the January 1st deadline. Time is now very much of the essence and what is looking a more plausible outcome at the moment is that Congress could agree upon a narrower agreement, rather than an all-encompassing arrangement that had originally been hoped for. This would at the very least least stave off any immediate shock to the US economy following the fiscal cliff actually being hit.