The Brexit talks are once again making centre stage which is causing a lot of movement for sterling so far this week.
The fishing rights remain one of the sticking points of the discussions but a correspondent from the Financial Times tweeted that the two sides had agreed a ‘landing zone’ concerning state aid.
Cabinet Minister Michael Gove spoke out on the fishing rights issue saying ‘We're going to decide who has access to our waters on our terms’ and went on to say if you're not going to talk turkey with us, that's fine. We can leave, we can say that's it, no negotiated outcome. We're ready, come what may.’
In the meantime European Commission President Ursula von der Leyen stated the EU has launched legal proceedings against the UK for breaching Brexit deal and international law. However, this may be another attempt at political posturing in order for the two sides to try and reach an agreement before times runs out.
GBPEUR exchange rates have been trading either side of 1.10 during the course of this week so keep a close eye out on the latest Brexit developments as to how Sterling exchange rates may be affected.
The euro has been trading in a tight range vs the pound and slowly creeping up vs the dollar as we come towards the end of this week. Eurozone CPI data published this morning fell compared to expectations which has caused the euro to weaken. If inflation falls it typically puts pressure on a central bank to consider cutting interest rates. With the eurozone already at historically low interest rates this signals problems on the continent and this is being reflected in the value of the euro.
Clearly the Brexit issue is one of the main topics affecting both the pound and the euro and the uncertainty between the two appears to be keeping EURGBP rates in a fairly tight range.
If we see the talks improve between the two sides however this could negatively impact the value of the euro against the pound as it may suggest that a deal could be reached and if so that could provide the pound with some much need certainty.
With these uncertain times ahead, please contact your account manager here at Foreign Currency Direct for the latest review into your trading positions or call in on 0044 1494 725 353.
US President Donald Trump has announced that he has Coronavirus and will quarantine for the next 14 days. With less than 5 weeks to go before the election this is likely to cause a lot of uncertainty for both the US and the US dollar in the near future.
Following the presidential debate between Donald Trump and Joe Biden the US dollar has gained against the pound. The stop start nature of the Brexit talks has caused the pound to remain under pressure and the Greenback has managed to maintain its recent strength against sterling.
At the same time the latest set of US non-farm payroll data is due out and this is likely to be even more difficult to predict during the pandemic so expect to see a lot of volatility later this afternoon when the two announcements are made.
We are less than 5 weeks to go before the US presidential election so expect to see more movement for the US Dollar particularly as we get closer to the end of this month as the campaign will be nearing an end.
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