Still no progress in Brexit talks as Boris Johnson’s imposed deadline passes
Monday 19 October, 2020
Daily Currency UpdateGBP - British poundLast week we saw another Brexit deadline pass with no real concessions from the EU or the UK and certainly no agreement reached. However, the EU’s Von Der Leyen stated that the EU negotiating team will return to London at the start of this week to continue negotiations with the UK.Prime Minister Boris Johnson isn’t so optimistic, confirming that unless the EU returns to London with further concessions there is no point in continuing. There ultimately needs to be a fundamental change in both parties stance if we are to reach a deal before the end of the year.Given the rising cases of Covid-19 throughout the UK, but in particular the North-West and now London, the increased lockdown measures with the tiered system in place and the lack of progress with Brexit talks, it’s a massive surprise at how well Sterling is performing. GBPEUR is trading comfortably above the 1.10 handle and GBP/USD heading towards the 1.30 handle.All eyes turn to Bank of England(BoE) governor Andrew Bailey who speaks on Thursday. It will be interesting to see if he drops any hints around further interest rate cuts.
Key MoversURThe Euro is destined for further losses with coronavirus cases surging across the Eurozone. In France, more than 30K new cases were reported on Thursday, and if cases do not stabilise quickly, a full lockdown may return.October's economic data release of PMIs is scheduled for the end of next week, and should we see softer figures, it will strengthen the case for quantitative easing from the European Central Bank(ECB) before the end of the year.For the time being, the outlook for the Eurozone does not look great and it could only be a matter of time before the Euro falls against the dollar and other major currencies. USDWith just over 2 weeks away from the U.S Presidential Election, Wednesday’s final live televised Presidential debate between Joe Biden and Donald Trump will gain plenty of attention.House Speaker Nancy Pelosi has set a Tuesday deadline to agree on a US stimulus plan that can be passed before the Presidential election on 3rd November. The Democratic Party continue to seek a $2.2 trillion package, with President Trump suggesting $1.8 trillion instead – the markets will be watching closely to see the size of the plan agreed.
- GBP/USD: 1.2990 - 1.3040 ▲
- GBP/EUR: 1.1065 - 1.1110 ▲
- EUR/USD: 1.1680 - 1.1740 ▼
- GBP/AUD: 1.8300 - 1.8350 ▲