The Pound has been quite volatile due to developing trade negotiation mandate
6 March, 2020
Last week, the pound has been quite volatile due to developing trade negotiation mandate and we saw advancement on euro as well as the dollar. Unfortunately, a statement made by the prime minister suggested no key developments and a higher risk of a no-deal come December, therefore despite the bounce last week Sterling has lost ground against the euro and trade negotiations are becoming the main focus of 2020.
The growing concern over coronavirus has had a negative effect on the global stock exchange and measures have been taken across the globe in order to prevent and control the virus. At this stage, everything’s being closely monitored and more cases are discovered across the globe, which may result in further volatility of major GBP pairings.
This week, the pound is performing better against major currencies due to recovering stock markets, which means that BoE will not rush with potential interest rate cuts as well as a press conference held by Chief Brexit negotiator Michel Barnier on the trading agreement with the EU has been praised for “constructive talks”. However, it is important to consider that more contestable points need to be discussed, and so far, the UK’s unwillingness to reference existing EU regulations may result in negative consequences for the pound in the future.
After the conference, the pound grew stronger against the dollar, and the rate went down slightly against the euro. More volatility can be expected due to ongoing Brexit talks as well as a still strong possibility of potential rate cuts, if you have to transfer any funds overseas we recommend you get in touch with your broker because uncertainty in the live markets will potentially push the pound both ways.
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