Good morning,

As far as it goes, there are rarely quiet days in the world of foreign exchange, but today may well be one of the exceptions. Obviously, rates can be moved by a rogue comment from a politician or a headline from an unknown source in the papers; but, with regards to what we know, today has nothing by way of meaningful data releases and the pressure cooker that was June for Brexit negotiations has seemingly simmered down.

Although the end of the month does signal the last possible chance for the UK to ask for an extension to the transitional period, the Government has made perfectly clear where it stands and reiterated the point publicly on multiple occasions. Essentially, what is keeping the pound from falling off a no-deal Brexit styled cliff, is the agreement from both sides that they will engage in as many rounds of negotiating as possible before the year is up, which could lead to some nail-biting further down the line.

October appears to be the new possible problem month for sterling, as Michel Barnier announced yesterday that it would signal “the real moment of truth” – with many in the market now seeing this as an informal deadline as the UK enters Q4 with everything still to play for.

Have a great weekend,

Author: Joshua Haden-Jones


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