Trading ranges have been relatively narrow over the past 24 hours with a lack of fresh incentives. Sterling overall was resilient during Tuesday despite a fresh decline in UK bond yields as the recent strength in oil prices continued to provide net support to the currency amid narrow ranges.

The UK Halifax house price index recorded a 0.3% increase in prices for October with the annual increase the fastest since February at 4.5%.

Difficulties within the UK government continued to be an important media focus amid expectations that weak leadership and divisions would have a negative impact on Brexit negotiations with official talks set to resume on Wednesday.
Stronger than expected Euro-zone retail sales data had no significant market impact and German bund yields continued to move lower during the day which sapped Euro support. During the European session, there were reports that ECB board members Weidmann, Coeure and Villeroy had opposed the recommendations of chief economist Praet at the October meeting and wanted to tie the overall amount of monetary stimulus to the outlook for prices rather than the narrower focus on bond purchases.

Despite these hawkish elements, EUR/USD declined to fresh 3-month lows near 1.1550 before rallying to the 1.1600 area. The dollar overall was hampered by reports that US corporate tax cuts could be delayed by 12 months
Data influences are likely to remain relatively limited on Wednesday which will tend to limit market activity, although there is still an important risk of higher volatility in other asset classes which would feed through into currency markets.

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