A lot of work remains to be done

It’s been an interesting week for the currency markets with new Brexit sentiment causing the rates to shift. Brexit talks gained momentum on Thursday as Boris Johnson and Leo Varadkar had reportedly made progress in their discussions, with Boris telling reporters “There is a joint feeling that there is a way forward, that we can see a pathway to a deal, – That doesn’t mean it’s a done deal. There’s work to be done.” As a result, the pound began its steady move up and as we entered into Friday’s trading speculation increased over the chance of an agreement, where it finally settled at the best levels seen against the Euro and Dollar since May of this year. Closing the week as the best performing currency and providing a great opportunity for those with a currency requirement to take advantage of the upward movement.

It is easy to get carried away with the idea that Sterling’s recent fortunes will continue but it’s important to recognise that there is still a long way to go and a variety of variable’s and roadblocks in the way which could easily reverse its recent gains. Over the weekend discussions in Brussels were held behind closed doors, but as it stands no releases on a Brexit agreement have been made. Although both sets of negotiators are in agreement on one thing… that “A lot of work remains to be done.”

There are a few key events happening this week which will no doubt be eagerly watched by traders and could have a profound effect on the pounds next movements.

There is little to note today, with an early morning speech from ECB’s De Guindos, followed by Eurozone Industrial Production figures, then BoE’s Cunliffe speaks at midday.

Tuesday posts UK Average Earnings and Unemployment Rate in the morning. Anything lower than anticipated could see fears of recession return, pushing Sterling lower and BoE’s Vlieghe speaks in the afternoon.

On Wednesday morning the UK posts Retail, Producer and Consumer Price Index, followed by the Eurozone Trade Balance, US Retail Sales, Canada Consumer Price Index and various speeches from both the ECB and the Fed.

On Thursday the EU Council summit begins, which will continue into Friday where members will deliberate on whether a Brexit deal can be struck between the EU and UK. Certainly, one to watch out for. The UK also post Retail sales figures and the US release Jobless claims and Industrial production.

Closing out Friday with no economic date but a couple of Fed member speeches.

If you are at all concerned about the upcoming events and its impact on the rates then get in touch with one our currency consultants today and ask about our limit and stop loss orders which could help you better manage your requirement and avoid any costly drops in the rates, while our Forward contracts allow you to lock in at today’s rate with a 10% deposit and settle the remaining balance at a later date set by you. We can also keep you updated on any sudden movements in the rates and inform you of any new potential outcomes which could help you with timing your transfers and mitigating your risk.