Pound Falls Back

After gaining over 2% in recent weeks, Friday proved to put the breaks on the recent gains made by the Pound seeing it lose 0.5% in the afternoon session. The recent Brexit positivity seemingly stopped in its traps by Jo Johnson. Jo, a keen remain voter, much the opposite of his brother Boris, who of course was a leading Pro-Brexit campaigner, quit his position of transport minister. The sixth minister to resign under Theresa May’s leadership. Stating Britain “on the brink of the greatest crisis” and the Brexit deal being negotiated will leave the UK economically weaker and the public should have the final say in any deal. Jo, also calling for a second referendum, now one of many leading figures requesting the same. As more and more calls for a second referendum take place and the public seems more and more frustrated with the way the negotiations are going, will we see a second referendum?

Before that, however, we saw UK manufacturing and GDP at 9.30 Friday morning, figures coming in marginally below where they were expected, not allowing any further gains in the morning session.

Further uncertainty to add to the current ongoing Brexit talks, that now look like they will progress into December and possibly beyond. the likelihood of a deal being struck looking more and more difficult, the prolonged period could prove to be a rocky road for Sterling and any uplift in rates to break the current trends looking extremely difficult. The issues of a ‘backstop’ regarding the Irish border still proving to be the biggest obstacle for any deal to be struck. The rates currently still sit at levels last seen in June but the recent events could change that very quickly. Why not take advantage of our forward contracts to secure the rate and protect yourself against the fluctuations and volatility of the currency markets.

There is further key data out this week,

Tuesday
09.30 GBP average earnings

Wednesday
09.30 GBP CPI
13.30 USD Core CPI

Thursday
13.30 USD Core Retail
16.00 FED Chair Powell Speaks

Friday
08.30 EUR Draghi Speaks