In what was a very quiet day yesterday, GBPEUR traded within a narrow 0.5% range throughout the trading day and into Asian trading. As the dust settled on UK Chancellor Rishi Sunak’s Summer economic update from Wednesday, buyers found enough ground to push the rate past 1.1150 and hold those gains. Against the US dollar, however, it was a different story. After breaking the 1.2650 mark, sellers quickly took profit and the rate fell back through that level, a mark which has been rejected four times over the last three months. At the time of writing, the GBPUSD exchange rate sits just above 1.2585.
The pound is also carrying momentum off the back of the positive outlook for the Brexit negotiations. As mentioned previously, the EU have softened their stance of access to UK fishing territories, which has been a big hurdle to overcome in the talks. The negotiations have once again finished early this week, as they did previously. The market is still weighing up whether that is off the back of progress or off of frustration.
It’s another quiet day for data today and sterling is expected to finish higher against the euro for the second consecutive week. Next week is a different story, however, with a host of data releases throughout the trading week. GDP data for the UK is released on Tuesday which will likely be a big driver for the pound. The last reading shattered records for the wrong reasons, where the economy produced the worst month since records began. Later in the week, the EU announce their interest rate decision for the next quarter, which currently sits at 0%.
Have a great weekend,
Author: Jack Nicholls, Relationship Manager
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