We live in strange times it seems: if it’s not the president of the USA sizing up the purchase of Greenland, it’s the German Chancellor offering hope of a change to the Irish backstop agreement.
Whether Merkel meant what she said with regards to finding a solution within the 30-day deadline she offered Boris Johnson, or if she was entirely misquoted, GBP needed no encouragement whatsoever so lift itself into the best days’ trading for a number of weeks.
The mood around the pound and Brexit, in general, became positively euphoric upon the additional of Emmanuel Macron’s announcement that “what Michel Barnier has negotiated can be amended while complying with the integrity of the single market … we can find a solution”. It seems the EU is coming around to the reality that no-deal genuinely would be awful for all involved, not just the UK.
It is important to mention at this stage of course, that despite the short-term jubilation; the odds are still very much stacked against the pound in the run-up to the 31st of October, but these good days for the sterling are certainly useful for those looking to achieve around 1.1000 on the Euro – an eventuality few would have predicted, myself included.
The week draws to a close with no notable data releases across the major currencies, with the market focus falling onto Jerome Powell, the chair of the US Federal Reserve’s speech at 15.00GMT.
The dollar will be very much in the firing line; as off the back of poor manufacturing, service and jobs figures yesterday and a global trade war that escalates on a seemingly daily basis, further rate cuts look likely – the question is, how many, and how soon?
With the August bank holiday on Monday, it is certainly worth discussing any open trades or prospective transfers you need to make before it comes around – as, just because the UK is off, it does absolutely not mean the rest of the world is!
Being caught out over bank holidays is an all too common occurrence in FX; especially when considering how even the most ambiguous of statements can shift the market nearly a cent and a half in a matter of hours. Give us a ring on 02073269120 to discuss in more detail.
Have a fantastic bank holiday weekend.