Sterling continued to be headline driven throughout yesterday with the EU summit kicking off in Brussels. In a volatile day of trading, GBPEUR moved within a 0.8% range and GBPUSD moved within a near 1.2% channel as traders digested news coming from the meeting. Testament to how volatile and on edge the markets are, after news broke that European Commission President, Ursula von der Leyen, was reported to have walked out of the summit, a sell off ensued. Ursula von der Leyen later took to Twitter to explain that a member of her team had tested positive for Covid and she needed to self-isolate. Today, GBP will continue to be at the mercy of such rumour and presumption.
Boris Johnson is also expected to “set out UK reactions and approach” to the negotiations today. After the UK’s chief negotiator, David Frost, advised the PM to persist with the talks (on the basis he thinks a deal can be agreed within the next couple of weeks), Johnson has a big decision to make as to whether to press ahead or walk away altogether. Frost did however express his astonishment on Twitter overnight, that the EU were “no longer committed to working intensively to reach a future partnership”.
In such volatile periods a firm order or a stop loss is a strategy worth considering to cover yourself or your business against sudden and sharp movements in the exchange rates. Please reach out to your account manager to see how WorldFirst can best help you navigate the days and weeks ahead.
Have a great weekend.
Author: Jack Nicholls, Relationship Manager
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