If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

GBP/EUR rocked as UK declares Brexit talks have ‘no basis to resume’

currency-newsGBP/EUR rocked as UK declares Brexit talks have ‘no basis to resume’
The pound traded in a wide range at the start of this week’s session as fresh Brexit uncertainty infused volatility into the UK currency.

Sterling is struggling for direction so far this morning, with GBP/EUR muted at €1.0987 and GBP/USD flat at $1.2935. GBP/CAD is rangebound at C$1.7062, while GBP/AUD and GBP/NZD hold steady at AU$1.8358 and NZ$1.9671, respectively.

Coming up, a deadline for US fiscal stimulus talks today is likely to be key focus for currency traders. Will Republicans and Democrats be able to reach a deal?

What’s been happening?

The pound roared higher through the first half of yesterday’s session after the EU signalled it was ready to ‘intensify’ talks and that all terms of a post-Brexit trade deal remained open for negotiation.

However, Sterling quickly reversed these gains after the UK government announced that talks have ‘effectively ended’ despite welcoming the ‘constructive move’ from the EU.

Placing additional pressure on GBP exchange rates was also Moody’s downgrading of the UK’s credit rating in response to concerns over economic damage wrought by the coronavirus pandemic and Brexit uncertainty.

The US dollar also weakened on Monday, with demand for the safe-haven currency being knocked by some positive GDP figures from China and lingering coronavirus vaccine optimism.

This USD selling bias helped to bolster the euro at the start of the week, with the negative correlation in the EUR/USD exchange rate propelling the single currency to a one-week high.
 

What’s coming up?

Turning to today’s session, the focus will undoubtedly be on US stimulus talks.

Today marks the deadline imposed by Speaker of the US House of Representatives Nancy Pelosi to reach a deal, and with the election just two weeks away there is likely to be plenty of political wrangling and assigning of blame.

But ultimately what markets will want to see is some sort of deal being reached, the failure to do so likely weighing on investors sentiment and catapulting the US dollar higher.

In the UK, we are likely to see the ongoing Brexit drama and the threat of more areas of the country entering stricter lockdown cap any upside in the pound.

Meanwhile, the euro is likely to remain highly sensitive to coronavirus developments as surging infection levels across Europe threatens the Eurozone’s economic recovery.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.