As the UK Chancellor of the Exchequer, Rishi Sunak, delivered his Summer Statement yesterday, sterling began to build some modest gains, as the £30bn extra stimulus was a tad more than expected. However, sadly for the pound, pretty much to the minute where Rishi completed his speech, the gains promptly sold off as UK markets realised punchier unknown projects were not forthcoming. Despite the negativity shown by the UK session following the statement, the Asian session did begin to buy sterling and, as of this morning, has kept GBP/EUR above the 1.11 handle and 1.26 on GBP/USD.
Realistically, if the pound is to keep hold of these gains above the key 1.11 and 1.26 levels, the rumours building of an agreement on fisheries in the UK/EU trade talks needs to come to something before the weekend. Although it may seem odd to put so much focus on fisheries with newspapers regularly plastering headlines decrying the lack of progress made on the issue, the fact is that it has now become a byword for what the overall sentiment of talks appears to be. The topic is so critical politically speaking for both sides, that the wider trade talks regarding services, financial transactions and other key UK industries are being held back by the fate of fishing rights in the Channel and the North Sea.
For now, today and tomorrow’s trade talks will continue in earnest on the matter – it’s all eyes on back on the headlines to gauge sterling’s next move.
Have a great day,
Author: Joshua Haden-Jones, Senior Relationship Manager
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