Presidential debate in the US was extremely negatively reported

This week began with a certain amount of positivity for the Pound with a resumption of face to face Brexit negotiations and hints that maybe there could be some light at the end of the tunnel, as talk of softening of stances on key areas such as fishing rights, started to leak into the press. As a result, we saw Sterling manage to push the Euro over a cent higher than the close of last week, with some smaller gains against the US Dollar too. Additionally, we saw UK Q2 GDP revised up to -19.8%, which likewise galvanised Sterling.

However yesterday saw Sterling fall back against the Euro. With no clear ecostat reason for the drop, it was largely attributed to the expanding of local lockdown restrictions and a diabolically bad performance from the PM in the House of Commons at lunchtime. His failure to understand his own lockdown policies, and an error strewn speech in parliament,t led to an apology released later in the afternoon. The PM’s performance has been under intense scrutiny over the course of the pandemic, with some suggesting a change of leadership is already in discussion behind the closed doors of the Conservative party. Political uncertainty, probably coupled with a natural correction following Monday’s gains therefore brought the Pound back down.

Last night’s Presidential debate in the US was extremely negatively reported with some reporters describing it as a childish food fight, just without the food. Insults were exchanged, President Trump interrupted Joe Biden 73 times and Biden told the President to “shut up”. All in all a head in hands moment for any proud American, and the markets have likewise reacted, with fears of a heavily contested election now likely to drive stock and currency markets over the coming weeks. The Dollar surprisingly seems to have gained some strength since, largely due to its safe haven status, but we can expect volatility for anyone with a USD requirement coming up.

During these unprecedented times with the pandemic, Brexit negotiations and a US Presidential election, you can expect extreme volatility on the currency markets, so stay in close contact with your CI currency consultant to be kept informed of exactly what is happening and what impact it is likely to have on your upcoming purchase. It may also be worth considering a forward contract to negate the volatility in advance.