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UK plays Brexit hardball

Daily Currency Update

GBP - British PoundWales has been placed in a short sharp lockdown, in an attempt to combat an accelerating second wave of COVID-19. The lockdown is scheduled to last two weeks, however, may be extended based on results. There are rumours suggesting the rest of the UK will follow suit in the next few weeks, with London already placed on high alert. Britain sees no basis to resume trade talks with EU, unless Brussels decide to become more willing to negotiate on the current roadblocks according to chief negotiator, David Frost. This sent GBP slipping and is currently trading just above $1.29 against the US Dollar. This may be seen as a negotiation tactic, as both sides look to pressure the other into making the first move. With Johnson’s self-imposed deadline extended, the UK will have until December 31st to get their affairs in order and negotiate a deal.

Key Movers

The US dollar sold off slightly on Monday, as investors were cautiously optimistic that a stimulus package could be agreed before the November 3rd presidential election. Nearly 30m Americans have cast early ballots, which has already shattered the current record, as voters adjust to the COVID situation. Florida, which is very much seen as a swing state, has opened voting early. Biden is currently a firm favourite for the election however so was Hilary in the 2016 election, before Trump pipped her to the post. The Eurozone posted a current account balance of €19.9 billion vs €16.6 billion prior to Tuesday morning, highlighting their optimistic recovery continues. Tuesday brings with it, no key data releases.

Expected Ranges

  • GBP/USD: 1.2870 - 1.3050 ▼
  • GBP/EUR: 1.0910 - 1.1075 ▼
  • GBP/AUD: 1.8240 - 1.8505 ▲
  • GBP/CAD: 1.6910 - 1.7190 ▼