No extension on the table

Good morning,

The UK’s chief Brexit negotiator, David Frost, has put increased pressure on the Pound by insisting that the UK will not be asking the EU for an extension to the current Brexit deadline of 31st December 2020. As highlighted in yesterday’s update, Brexit negotiations are well and truly back in the limelight following the announcement that trade talks are set to resume, albeit via video link. Frost was quoted as saying “I want to reiterate the Government’s position” in regards to the fixed date at the end of the year and that “extending would simply prolong negotiations, create even more uncertainty, leave us liable to pay more to the EU in future, and keep us bound by evolving EU laws at a time when we need to control our own affairs. In short, it is not in the UK’s interest to extend”.

Last night, during the usual 17:00 GMT Downing Street address to the public, Dominic Raab announced a minimum of three more weeks of lockdown measures for the UK in an attempt to overcome the virus. Traders are digesting and predicting the impact of the extended lockdown on the economy in an attempt to mitigate risk and maximise returns. Sterling was little unchanged overnight but has since lost about half a cent against USD at the open in Europe this morning.

Elsewhere in the World, China has reported a contraction in the size of the economy for the first time since records began in 1992. The official figure released was a -6.8% reduction for Q1. With China’s size on the global stage, the knock-on effect for other countries who rely on them for their imports/exports could be vast when their own figures are released.

Enjoy your weekend,

Author: Jack Nicholls, Relationship Manager