Ongoing Brexit negotiations with the upcoming European Summit

5 October, 2020

Tom Arnold

Last week the currency markets were closely monitoring the ongoing Brexit negotiations with the upcoming European Summit and self-imposed deadline of the 15th of October very firmly in everyone’s minds. Could the deadlock be broken? In short, no, but there does seem to be some optimism around, with various comments from both sides giving a tentative feeling that we are closer than we have been before to some kind of agreement. There are still key differences on some of the major points, notably fishing rights, so it is still hard to see how a deal can happen, but we shall see… Critically Boris Johnson and Ursula von der Leyen spoke on Saturday and renewed their joint commitment to achieving a deal.

The other major news of the week was President Trump testing positive for Covid-19. The Dollar strengthened as a result, not because the markets favour Trump being ill, but simply because the US currency is a safe haven currency, and so with markets fearful of the impact of a potential change in President if he fails to recover, investors pilled into the Dollar giving it strength. With Trump seemingly on the mend already, we could expect some volatility on this side over the coming days.

The week ahead is fairly busy, with critical data on most days, so stay in touch with your CI account manager to be kept informed of what is happening and how you can expect it to impact your currency requirement.

European Retail Sales
European Service PMI
UK Services PMI
US Services PMI

Australian Interest Rate Decision and Monthly Policy Statement
ECB President Lagarde Speech
FED Chair Powell Speech

German Industrial Production
UK House Price Figures

German Trade Balance

UK Trade Balance
UK Industrial and Manufacturing Production