Daily Currency Update

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Brexit’s impact on USD

USD - United States Dollar

Demand for both the euro and the Great British pound fell off this morning after early trading pushed them higher against the US dollar.

EURUSD reached 1.1216 overnight and has since fallen back to 1.212. GBPUSD climbed above 1.344 and has since come down to 1.331.

Britain and Europe remained at odds over rules for competition and fishing rights. Britain’s access to the European Union ends on December 31. European Commission President Ursula von der Leyen and her counterpart Boris Johnson, Britain’s prime minister, agreed to continue discussions over a trade deal.

Key Movers

Sterling continued to feel under pressure through the end of last week, falling to a low of 1.3134 against the USD, as both the UK and EU stated a ‘No deal’ Brexit was looking more likely. As the self-imposed Sunday deadline approached, Boris Johnson appeared ready to embrace a no-deal Brexit and prepared Royal Navy gunboats to defend UK fishing waters. In the end, talks continued through Sunday with the European commission president Ursula von der Leyen and both parties have agreed that negotiators would go "the extra mile" in the next few days to reach a deal.

What a week for the Australian Dollar. Against the Greenback the Aussie has been the best performer and has broken above the key psychological level of 0.75, which was a significant figure from a technical perspective. The main driver has been a surge in iron ore futures thanks to Chinese demand and a potential shortage in supply due to disruptions caused by storms hitting Western Australia. The local unit is closely correlated to commodity prices, so it is no surprise to see the pair rise to these levels. Local markets shrugged off negative news regarding a vaccine being produced by an Australian firm CSL and the University of Queensland, the Australian government has moved to an alternative supply after trials returned a false HIV positive result.

Expected Ranges

EUR/USD: 1.212 - 1.216 ▲

GBP/USD: 1.329 - 1.344 ▲

AUD/USD: 0.753 - 0.757 ▲

USD/CAD: 1.272 - 1.278 ▲