Brexit Breakthrough?

The UK government went back on their earlier word not to be strong-armed into paying extortionate amounts to the EU, enabling the continuation of Brexit talks. The sum of up to €50B has been quoted as being the figure for the “divorce bill”. It remains to be seen if any further payments will be forthcoming at the latter stages of negotiations…the continuing effect on GBP was positive with gains against the euro and USD of around a half-cent, throughout the days’ trade. This was tempered with continuing concerns over the Irish Border and the part it will play in the Brexit.

As noted in yesterday’s report, many major banks have now ditched the idea of the pound slumping to parity against the euro. There remains a very real threat, however, of a drop of up to nine cents (€9,000 per £100k converted) below current levels before the end of winter, with Morgan Stanley the latest to forewarn investors. Borrowing in the UK (Oct), in the form of mortgage approvals and other consumer credit, is also down, another negative hit for the UK housing and commercial economies.

Major Data Leaks Releases

On a day when Apple revealed glaring security holes in its new OS, president Trump again making the wrong call with social media, several eco-stats and speeches from Fed members across the pond were observed. The big one was of course the preliminary GDP figures, with the “annualized” numbers coming in above the previous and expected, whilst the “price index” was on par with the previous but slightly below the expected forecast. This, and excellent results from home sales and oil stocks, enabled USD to claw back losses earlier in the day finishing quarter of a cent higher than where it had started, after dropping nearly half a cent earlier in the day, largely assisted by Janet Yellen testifying that the US economy is gaining in strength and further interest rate rises are warranted. (Long term, this could well lead to a stronger USD and therefore more expensive to buy.)

This highlights the importance of timing your currency purchase and to be in close communication with your broker here at Currency Index – if you were buying £200,000 worth of Dollars for a property completion, the amount achieved at 1pm would have been $1100 less than at 4:20pm!

Today

Today has another hectic schedule with the Euro-zone dominating the morning session with the US taking centre stage in the afternoon. Inflation figures, GDP, retail sales and employment figures, as well as the ECB’s Praet speech from Europe, with personal spending and jobless claims from the US later on, all having the capacity to significantly alter your cost and what you get for your money. Minimize the volatility risk as best you can and make Currency Index the most important call you make today.