29 September, 2017
Thursday was a fairly quiet day in the markets with the key focus on round 4 of Brexit Talks. With Mrs. May’s speech last week supposedly a positive step forward to bridge gaps between the UK and EU negotiating parties, there was hope that we finally may get some more positive news (and potentially a weaker Euro) and progress can be made. That hope however, was shot down fairly quickly by EU chief negotiator Michel Barneir, referring to some ‘big gaps’ still needing to be plugged before any talks on trades can begin. Three issues in particular being highlighted; divorce bill settlement, Northern Ireland border and the rights of the EU citizens.
The day’s biggest gains were made on GBPUSD currency pairing where the Dollar dropped half a cent over the curse over the day. The current USD weakness continuing this despite posting better than expected GDP figures. Should the rumoured rate hike in the US happen, we could see rates dip below the crucial 1.30 mark, with anyone requiring any USD why not take advantage of these current highs.
With the German elections still at the forefront of most European discussions, Merkel’s search for a coalition partner continues to keep the weaker Euro under pressure. Should this take longer than Merkel hopes we could see the Euro weaken further. However with the Euro threatening to gain some ground yesterday morning, how long will it be before Euro claws back lost ground?
Friday’s main currency news focus will be on the UK current account released at 9am and the key data for the day will be at 3 when BOE head Carney will be speaking. Sandwiched in between both those will be GDP data from Canada at 1.30, those of you with loonie in hand may want to keep a eye on that one.
If you’re rate conscious and don’t want to take the risk of seeing the rate drop again why not take advantage of our forward contracts allowing you to fix a rate for two years, particularly with a slightly weaker euro.
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