UK Prime Minister Boris Johnson confirmed once again on Friday that he believes the UK government will be able to strike a deal with the EU in order for the UK to leave the EU on the 31st of October. He has until the 19th of October to achieve this. If he hasn’t got a deal passed by this date, he will have to request another Brexit extension. This is something he has previously said he would rather ‘die in a ditch’ than do.

He once again referred to a recent bill passed within the houses of parliament stopping the UK leaving on the 31st without a deal in place as the ‘surrender act’. This comes at a time where he’s coming under pressure regarding his choice of language when referring to Brexit, as a number of MP’s have complained about his divisive rhetoric and it’s potential to incite violence. He is also having to defend himself against accusations of misconduct in public office whilst he was London mayor in reference to his relationship with US businesswomen Jennifer Arcuri.

Brexit Issues Resurface

Brexit key date: 19th October

PM Johnson confirmed on Sunday that he won’t resign if he’s required to request an extension on Brexit next month, in order to avoid having to make the request. In terms of sterling exchange rate volatility, it is most likely that movement could potentially come around the 19th as opposed to the 31st, as by then we will know the next steps for Brexit. A general election appears to be off the cards until Labour are more forthcoming, and up until now they have ruled one out. There could be some further Brexit related updates over the next few days as the Tory Conference will continue to take place.

The first day of the Tory conference was overshadowed by accusations against PM Johnson from a journalist regarding his behaviour at a private meeting 20 years ago. Nigel Farage announced on Sunday that he will run for a seat in Westminster when the next election is called.

European Central Bank members split on latest monetary policy decision

Economic sentiment within the Eurozone hit an almost 5-year low during the month of September, the European Commission reported on Friday. Global trade tensions are being blamed as the figure for economic mood came out below market expectations.

Another potential downside for the euro moving forward are rumours of a split within the European Central Banks (ECB) policymakers, after the departure of Sabine Lautenschlager last week. The German ECB member was one of a third of the 25 policy makers that disagree with the latest ECB monetary easing package, and members of the ECB such as chief economist Philip Lane have already come out to try and play down the divisions. This topic could be worth following for those of our clients with a euro requirement.

US Jobs Data and Tech Tax

US China trade talks and Friday's Non-Farm payroll to influence US dollar rates

The rumours regarding US plans to de-list Chinese companies from US stock markets in order to limit investment into China have already been dismissed by the US Treasury. Although the damage has already been done, after the rumours reported by Reuters caused US stock markets to fall on Friday.

Trade war talks between the US and China are expected to resume next month. Readers with a US dollar currency requirement may wish to continue to monitor this matter as we’ve seen it impact USD exchange rates along with the US economy for over a year now.

Another potential market mover will be this Friday’s Non-Farm Payroll figures which is a monthly update on new jobs created within the US outside of the agricultural sector. Do get in touch with us before this date to plan around the release if you wish, as it’s usually a key moment of the month for US dollar exchange rates.

Reserve Bank of Australia looks to cut interest rates

Some major banks in Australia, including Westpac, are predicting an interest rate cut from the Reserve Bank of Australia this month. The Aussie dollar has been forecasted to lose further value also as Westpac has predicted that the AUD/USD exchange rate could hit a 10-year low due to the rate cuts which had been ruled out at one stage.

The unemployment rate down under has increased from 4.9% in February to 5.3% now and it’s these rising jobless numbers that are resulting in predictions for further rate cuts and a slowing economy in Australia. To add some perspective to the Aussie dollars woes, the pound is trading just over 3.5% from it’s 3-year highs against AUD, whereas against the US dollar the pound is trading around 8% from it’s 3-year highs against the US dollar.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.