Round one of the video link Brexit negotiations kicked off yesterday between the UK and Europe, continuing over this week. Various teams from both sides are scheduled to meet, where they will thrash out the finer details of the UK’s leaving of the trading bloc.
As I have discussed previously, one of the big pointers for select European countries is the rights to the fishing waters which the UK is strongly opposing. Both currencies will be sensitive to any headlines off the back of this week’s talks, as each day ticks by taking us closer to the July 1ST deadline for the negotiation period to be extended past the year-end. Also, without a deal looking likely, it will lead us closer to a no deal Brexit come 31ST December 2020. The currency pair was fairly muted yesterday, moving in a narrow 0.4% range.
The US Dollar continued to make gains against a host of commodity currencies yesterday, where traders moved to safer havens following the price of oil dropping below zero for the first time in history. In an event never seen before, this means that producers were paying the market to take oil from them. Global demand has dropped due to the supply chains being hit by the coronavirus outbreak and an oversupply to the market means there is not enough storage space to store the oil. As lockdown measures are loosened globally however, demand could return to the market and give the commodity currencies some room to breathe.
Have a good day,
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