Brexit will yet again be pulled to the forefront of trader’s minds today, with the resumption of the trade negotiations between the UK and Europe. In what is seen as a light day on the economic calendar today, with little to report in the way of figures being released, there should not be any sharp data driven movements. Both GBPEUR and GBPUSD have opened at similar levels to the close of the trading week, sitting at 1.1056 and 1.3115 respectively, at the time of writing. One pair to make a note of is EURUSD, which is testing 1.1860, a high seen last week.
Starting tomorrow, both the UK and Europe will once again come together in Brussels in an attempt to thrash out the details of a trade deal for the bloc, and what should be, one of their biggest trading partners. The general mood within the market is that come the year end, there should be a deal in place. In what has been a very turbulent few years; seeing a change in UK government, over a 20% price change, various scrapped deals and a global health pandemic, markets will be hoping for some level of clarity. The positive mood is also being echoed by the UK’s chief negotiator, David Frost, who said on Thursday that a deal can be agreed by the end of September.
Later in the week, there are PMI data releases in the UK. This will give an indication to the health of the UK economy. As we have mentioned on numerous occasions, markets are looking for the economy who can return to a level of normality as soon as possible. However, even with countries with seemingly water tight controls, such as New Zealand, cases can still spread rapidly and lead to another lockdown.
Have a great day.
Author: Jack Nicholls, Relationship Manager
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