Good morning,

A key focus for this working week will be how the US dollar reacts to results of the US election. The dollar index has retraced back to levels last seen in July, a by-product of the strengthening equity markets and a weakening dollar.

At roughly 06:00 this morning, GBPUSD feathered 1.32, a rate that has not been seen since 7th September. EURUSD fell just short of 1.19, a rate that has not been seen since the 15th September. Goldman Sachs have released  predictive commentary on EURUSD, stating they see continued dollar depreciation into next year which could put EURUSD at 1.25. Following the results of the 2016 US election, GBPUSD moved 10% higher in the following 12 month period.

UK and EU Brexit negotiations will continue this week, taking over the baton from the US and delivering further political uncertainty. As the 31st December deadline looms closer, both the pound and the euro will be exposed to new developments.

Have a great day.

Author: Alistair Hutson, Head of Relationship Management

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