Cable spikes as Merkel drops hints of.........>

FOREX: Cable spikes as Merkel drops hints of compromise

-It was a generally quiet day across most G10 FX markets, before a speech from

German Chancellor Merkel sent GBP soaring across the board, as she suggested the

EU could take a more practical approach to solutions surrounding the Irish

border (the real sticking point for both sides ahead of the G7 summit this

week). This led traders to react optimistically, bidding GBP/USD up to the

week's best levels at $1.2179. PM Johnson heads to Berlin and Paris tomorrow to

meet with Merkel and French President Macron to hash out discussions further.

-Elsewhere, sentiment soured slightly into the close, with core European indices

dragging US futures into the red after a positive start. The lower US yield

curve helped sap some strength out of the greenback, but havens were undeterred,

with CHF and JPY the best performers Tuesday.

-Canadian CPI, US existing home sales and the Fed minutes take focus Wednesday.

The minutes will take particular focus ahead of Fed chair Powell's speech in

Jackson Hole Friday, in which he directly addresses "challenges" to monetary

policy.