Sterling Moves Lower
14 September, 2020
Luke Dyson
Following on from last week we saw sterling have a hard time against the euro and dollar with just over a four cent drop in a couple of days. This was a result of Boris’s new five week Brexit time line to the 15th Oct to get a post Brexit trade deal agreed.This agreement must be in place by the 15th in order for the UK to be prepared to leave ahead of December 31st. However Boris has stated if an agreement is not met the UK will be left with an Australian style trade plan with the EU. Because there is no distinct agreement in place as of yet this has left a massive amount of uncertainty to what is going to happen by the 15th Oct and so it is taking its toll on sterling’s strength.
Also to add to the mix and sterling’s weakness the UK’s corona virus cases have rocketed for a second time similar to back in the may lock down. With new tighter restrictions being put in place from today limiting groups to six people in an attempt to slow the spread. This now adds a lot of uncertainty to the currency markets as there is no clear end in sight to the virus until a vaccine or heard immunity has been achieved.
With the euro rate now dropping to new lows if you are a euro seller please take advantage of this as we are now not far off the best rate since march 2020 sell euros. To put in perspective how much you have already saved this last week if you were to have sold €100k at the beginning of the week and then compared to the end of the week you would have over £3k more.
Please get in touch with your currency consultant if you would like some guidance to get a strategy in place to limit your risk or even lock in this very desirable selling opportunity.
Eco stats for the week
14/09/2020
11:00 Euro group meeting
15/09/2020
09:30 GBP claimant count change
10:00 German ZEW survey
16/09/2020
07:00 GBP CPI
13:30 USD Core retail sales
13:30 CAD CPI
19:00 FOMC Interest rate decision
23:45 NZD GDP
17/09/2020
02:30 AUD unemployment change
07:00 EUR CPI
12:00 GBP Interest rate decision
18/09/2020
07:00 GBP Retail sales
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