Pound retreats from Friday’s 3-month highs on Brexit deal doubts
Monday 14 October, 2019
Daily Currency UpdateGBP - British PoundThe pound rallied to a 3 month high on Friday on renewed hope of a deal being struck between UK and EU negotiators, the Irish PM in particular seeming positive following a crucial meeting with the UK PM late in the week last week. But it's fallen off since and opens 100 points lower vs. the USD - under 1.26 - after less than encouraging headlines over the weekend; the DUP has now said they can't agree with the latest proposal and Johnson won't get enough support in parliament without the DUP, whilst EU chief negotiator Michel Barnier said the UK's plans for the tracking of goods were unacceptable.Not quite back to the drawing board yet, though. Negotiating teams are due to meet again today ahead of the EU summit starting on Thursday. If there is agreement, a deal will likely be voted on next Saturday in a special Parliamentary session.
Key MoversSafe haven currencies fell through trade on Friday, with the USD, JPY and CHF all forced lower in the wake of the US-China trade agreement. The partial deal reinforced investors' optimism for a full-scale deal to be reached. As global risk factors eased through last week, commodity and emerging market assets found support while the USD marked fresh one-week lows.Despite the recent uptick in trade optimism there are still significant structural barriers that must be overcome before a complete trade truce is reached so risk demand looks capped for the moment.
- GBP/USD: 1.2490 - 1.2600 ▼
- GBP/EUR: 1.1380 - 1.1450 ▼
- GBP/AUD: 1.8500 - 1.8700 ▼