Downing Street Denies Breakdown in Brexit Talks
Thursday 23 July, 2020
Daily Currency UpdateGBP - British PoundAfter reports on Tuesday that Brexit negotiations had broken down to a point of no-repair, a spokesmen for British Prime Minister Boris Johnson on Thursday morning stated that Britain remained committed to reaching a balanced agreement with the European Union, however that there were significant differences between the two sides. We are currently in the fifth round of negotiations on the future relationship and the talks have near enough stalled, weighing heavily on the pound and halting any major recovery for the currency. GBP/EUR continues to trade below the 1.10 handle and although the US Dollar is under significant selling pressure, GBP/USD is still trading around the 1.27 handle. All eyes are now certainly on tomorrow morning’s retail sales and PMI reports.
Key MoversOver the past few of days it has been obvious to see the USD has been under significant selling pressure. There are several reasons that can be attributed to this. The most significant one being the uncertainty around the US economy after the extra $600 unemployment benefit expires at the end of the month. Congress are currently in discussions around attempting to implement another similar stimulus package so as not to prevent a recovery in the economy. Expect any headlines regarding this topic to have a big impact on the rates over the next few weeks. Secondly, the housing market was a big contributing factor as existing home sales rose far less than expected in June and house prices have also fallen in May.The Euro is the best performing currency this week so far, after the stimulus package announcement on Tuesday and the continued low Covid-19 numbers, the single currency has gone from strength to strength. EUR/USD remains comfortably above the 1.15 handle.
- GBP/USD: 1.2650 - 1.2810 ▲
- GBP/EUR: 1.0940 - 1.1070 ▲
- GBP/AUD: 1.7710 - 1.7860 ▲
- EUR/USD: 1.1520 - 1.1640 ▼