European session review: GBP mixed as final round of EU-UK trade talks kicks off

GBP traded mixed as the final round of trade talks between the UK and the EU kicked off. The pound rose against JPY, USD and CAD, but it fell against AUD, NZD and CHF, and was little changed against EUR.

The UK and the EU negotiating teams began their ninth round of Brexit talks in Brussels on Tuesday, hoping to unblock some important aspects of their future relations. A final agreement must be reached by the end of year but both sides have set a preliminary deadline for October as it will take some time to sign off any deal. On Monday, the representatives of the UK and the EU reiterated that "significant gaps" still remained but the Brexit deal was still possible.

Market participants also assessed the Bank of England’s (BoE) monthly Money and Credit statistical release, which revealed that the number of mortgages approvals for house purchase climbed to 84,700 in August (the highest since October 2007), from 66,300 in July, beating economists' expectations of 71,000. The report also showed that net mortgage borrowing by households stood at GBP3.1 billion in August compared to a revised GBP2.9 billion in July (originally GBP2.7 billion). Economists had forecast GBP3.65 billion. Meanwhile, consumer credit in the UK increased GBP0.3 billion in August, following a revised GBP1.1 billion gain in July (originally GBP1.2 billion). Economists had forecast a GBP1.45 billion advance. Net lending to individuals in the UK was GBP3.4 billion in August compared to GBP3.9 billion in July.