FX round-up: Sterling firms as May appears to stay Brexit course

Sterling performed well on most major currency crosses on Wednesday as UK prime minister Theresa May claimed there would be no attempts for the country to remain within the EU by the so-called back door.

The UK currency nosed dived in late June when the UK voted by a very slim margin in a non-binding referendum to quit the EU. Sterling has yet to recover, having been range-bound since that time.

At 16:59 BST, sterling was up 0.37% to $1.3128 and up 0.32% to €1.1778. It gained on the Canadian, Australia and South African units, but slipped against New Zealand's.

The dollar-spot index was up 0.05% to $96.098, and gold was lower 0.38% to $1311.5 an ounce.

Research out today showed UK consumer confidence improved in August but still lacked overall, while Nationwide data showed UK house prices improved in the year to July.

Meantime, May said Brexit meant Brexit, although exactly what that means is not entirely clear.

"The pound came within a whisker of breaking through the €1.18 level against the euro this morning for the first time in three weeks," said HL Currency Service's Chris Saint after May's comment.

The senior analyst cited the release of data that showed euro-zone unemployment steady at 10.1% in July, as the bloc's inflation rate came in flat at 0.2% in August.

"The lack of progress on these key metrics will strengthen calls for the European Central Bank to take action with its next policy meeting now little more than a week away," said Saint.

For the minute, investors are eyes-peeled ahead of Friday's US non-farm payrolls data, preceded by a raft of US, UK and European manufacturing data out Thursday.

The dollar turned in a mixed performance on its key crosses. It faded on the euro, aussie and kiwi, but gained versus the loonie, rand and yen.

US data out on Wednesday revealed US pending home sales rose more than expected in July, while other figures showed Chicago-area economic activity worsened more than expected in August.

"The afternoon’s main piece of data, the ADP non-farm employment change figure, failed to provide investors with much guidance for either Friday’s government-released number or the likely timeline of a Federal Reserve rate hike," said Spreadex's Connor Campbell.

Speaking at an event in China earlier on Wednesday, Boston Fed president Eric Rosengren and Chicago Fed president Charles Evans separately touched on the central bank's potential future path of interest rates without giving much away.

Finally, both the greenback and sterling surged on the South Africa's rand throughout the session, respectively rising 1.4% to 14.7068 rand and 1.72% to 19.3063 rand.

This followed a debt manager Futuregrowth ceasing loans to some South African state-owned firms, while a narrower July trade surplus in July for that country also added pressure on local markets.

Markets have further been concerned about South Africa's currency as its finance minister, Pravin Gordhan, faces potential arrest over allegations about his role in a revenue-service spy unit.