Daily Currency Update
GBP - British PoundBrexit news dictated the pound's position yesterday after negative sentiment surrounding the lack of time that Johnson has to negotiate a divorce deal sent Sterling on a downward march. This came after the Finnish PM, Antti Rinne, argued that both the EU and UK need more time to negotiate an effective and mutually beneficial deal. This opposes comments from Barnier however, who claimed there is sufficient time to pass a deal by Thursday (EU Summit). Since these comments, officials have claimed that the EU can call for an emergency Brexit summit next week, which would allow Johnson more time to finalise his deal. Many are calling for a confirmatory referendum that would include 3 options:1. Teresa May Brexit Deal2. Boris Johnson Brexit Deal3. RemainAll three of these options would lead to Sterling gains, as long as the EU also accept. Corbyn has backed the idea, stating that the final say should lie with the people. Expect extreme volatility in GBP as we edge closer to the EU Summit on Thursday.
All eyes were fixated on the US yesterday, after lack of clarity surrounding ‘Phase 1’ of the US-China trade war begins to hurt the USD. Despite ‘Phase 1’ being agreed last week, it seems neither side can offer a unified position on what the agreement actually entails. This dented US equities and left China wanting further talks before November in order to provide some clarity on the deal. China’s PPI figures were posted overnight as we were given further confirmation that the trade war is taking its toll on both sides. China’s PPI figures came in at -1.2%, showing the change in the price of goods purchased and sold by producers. How long will both sides keep playing hardball, despite the negative economic consequences that come hand-in-hand?
- GBP/USD: 1.2580 - 1.2750 ▲
- GBP/EUR: 1.1415 - 1.1575 ▲
- GBP/AUD: 1.8610 - 1.8780 ▲