Home Daily Commentaries Brexit uncertainty weighs on the pound

Brexit uncertainty weighs on the pound

Daily Currency Update

GBP - British Pound

The pound weakened on Monday overnight as Brexit continues to weigh on the British currency. UK’s Brexit Minister, David Frost, said, “We can't carry on as we were before". He also said "If, after Brexit, all we do is import the European social model, we will not succeed.”

The UK reportedly won't trigger Article 16 before Christmas, suggesting that they are expecting negotiations to continue in the next few weeks. Brexit uncertainty has remained an anchor for the pound for the past few years.

Key Movers

European Central Bank (ECB) Governing Council member, Martins Kazaks, said on Monday that the policy can look through inflation as long as it remains transitory. Which mirrored similar comments from President Lagarde. It appears that all ECB members are on the same page with regards to European monetary direction, suggesting a change in policy may not be on the horizon. The euro remains under pressure.

As has been the case over the past few weeks, the drop off in global risk sentiment continues to support the US dollar, particularly as Europe looks to impose new lockdowns and investors continue to flock to safe haven assets.

Expected Ranges

  • GBP/USD: 1.3310 - 1.3475 ▼
  • GBP/EUR: 1.1820 - 1.1955 ▼
  • GBP/AUD: 1.8460 - 1.8600 ▼