Despite opening lower this morning, the Pound is still one of the stronger performers of 2020. During the opening of European trading, the EUR rate finally broke and kept below the key 1.20 level, reading at 1.1979 at the time of writing. USD is also below the crucial 1.30 level.
David Frost, the UK’s chief Brexit negotiator, laid out the UK’s vision for Brexit last night when delivering his speech at a university lecture in Brussels. Although the official trade negotiations are yet to begin, markets are digesting all of the speeches and comments from both sides to see how the transition phase will play out.
As expected, Frost spoke about how the UK will be looking for a Canadian-style trade deal, however, the big takeaway was that the European demand for the UK to follow their laws post-Brexit was not acceptable and that it “isn’t a simple negotiating position which might move under pressure, it’s the point of the whole project.” He also went on to stress that the UK will not be extending the transition period past December 2020 – a firm line in the sand for Brexit to be resolved.
This morning at 09:30 GMT, we have employment data due out in the UK, showing the health of the labour market. At 10:00 GMT, there is the ZEW survey release from Germany, showing economic sentiment. This is expected to show a slight ease, with global effects such as the Coronavirus outbreak dampening appetite.
Minutes from the Reserve Bank of Australia’s first meeting of 2020 saw sentiment point towards a rate cut this year. Although interest rates have remained at 0.75%, AUD has dampened on the news.
Have a great day.
Author: Jack Nicholls, Relationship Manager
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