GBPUSD is back wrestling with 1.30 again, seemingly unable to avoid its gravitational pull, whilst EURUSD found support with price moving higher from 1.1740 to 1.1835 in a relatively short period of time. GBPEUR has settled back into the familiar territory of 1.10 having lost 2.9% since the beginning of September.
The EU have confirmed an urgent meeting with the UK, which will take place today with Michael Gove meeting with vice-president Maros Sefcovic to seek clarification on the UK’s position surrounding the Withdrawal agreement. The Times reported that the EU see’s Boris Johnson’s latest actions as a deliberate attempt to sabotage trade negotiations. As mentioned towards the beginning of the week, these headlines carry a fair punch in relation to some of the traditional economic data which still seems to be taking a back seat. There have already been punches thrown that include launching legal cases if talks do not result in clear and positive outcomes.
Comments from the European Central Bank yesterday stated that forecasts showed more confidence in the Economic outlook than previously stated. This saw EURUSD jump nearly a cent higher with positive revisions to GDP being made, however this was relatively priced in following the increase in retail sales data. Christine Langarde will be walking the plank again and finding the balance between talking the Euro down whilst also driving long-term optimism. Bloomberg opinion wrote a nice piece on how a dovish stance could end up supporting stocks and the Euro, including increasing the pace of asset purchases without increasing the notional amount. The aggressive bond buying program that the markets have witnessed over the last few months has been a combination of national and EU input with the EU itself pledging 750 billion Euros, alongside Germany and France at 220 billion and 57 billion respectively.
Plenty going today and tomorrow which will move the markets, so please do think about what your strategy looks like in the short and medium term. We’re here to help.
Have a great day.
Author: Alistair Hutson, Senior Relationship Manager
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