Home Daily Commentaries Brexit talks rumble on

Brexit talks rumble on

Daily Currency Update

GBP - British PoundOnce again Brexit talks resume tomorrow as both the EU and UK look to come to deal before the 'deadline' of the EU summit on 15th October. Even the deadline date has become a cause of confusion/difference with the UK sticking to the week after next whilst there are reports out of Europe that the EU is already considering the end of October. Either way as dates are pushed back the clock is continuing to click towards the end of the year and the shorter this time frame is the more volatility can be expected.Meanwhile, over the weekend Bank of England MPC member Silvana Tenreyro defended the use of potentially using negative interest rates to support businesses and consumers. Tenreyro, who is seen as a 'dove' amongst the MPC because she generally favours looser monetary policy, is positioned almost on the opposite side though of the main man - Governor Andrew Bailey. Bailey's comments on Tuesday last week maintained that it would be a 'sin' to use a tool (in this case negative rates) which was not operationally viable. All this talk of loose monetary policy ought to weigh on Sterling but we open the week up positively against the dollar and euro.

Key Movers

The big news over the weekend comes from the story of the President's nomination for the vacant position on the US Supreme Court. It was no surprise that Trump nominated conservative judge Amy Coney Barrett but what this does do is light up the Presidential election once again. Not only will the Democrats now have to delicately dance around holding up this nomination before the election but they will have to do so without looking to undermine Barrett's conservative beliefs which could antagonise voters. Even more importantly though is that this nomination makes it even more unlikely that both parties will cross the aisle to agree on a much needed new fiscal package. Remember the $600 boost to unemployment benefits expired last month.

Expected Ranges

  • GBP/USD: 1.2750 - 1.3000 ▲
  • GBP/EUR: 1.0965 - 1.1100 ▲
  • GBP/AUD: 1.8080 - 1.8320 ▲
  • EUR/USD: 1.1615 - 1.1675 ▲