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Further Brexit Extensions Dampen Sterling

Thursday 12 November, 2020

Daily Currency Update

GBP - British poundYesterday Sterling dipped lower as rumours of another extension to the on-going Brexit negotiations swirled. The mid-November deadline looks set to be extended as the two sides are yet to come to a formal agreement on Britain’s exit from the EU. GBP/USD bounced off the 1.33 handle and is now sub 1.32 whereas GBP/EUR tempted to test 1.13 however is now back below 1.12. This morning UK gross domestic product grew by a quarterly record for the months July-September, growing by 15.5%. However, this missed the forecast of 15.8% and certainly doesn’t to cover the crash of over 20% in the 3 months prior. In a further blow for Prime Minister Boris Johnson, his director of communications, Lee Cain, resigned yesterday. This suggests there is a lot of tension in the UK government right now, particular over Brexit and how we are dealing with Covid-19.

Key Movers

With it being a US holiday yesterday, the markets were fairly quiet. However looking ahead we have a busy afternoon thanks to the central banks, with Bailey from the Bank of England, Powel from the Federal Reserve and Lagarde from the European Central Banking all speaking this afternoon.

Expected Ranges

  • GBP/USD: 1.3125 - 1.3250 ▼
  • GBP/EUR: 1.1110 - 1.1215 ▼
  • GBP/AUD: 1.8050 - 1.8230 ▼
  • EUR/USD: 1.1730 - 1.1880 ▲