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Weekly roundup: Pound fluctuates amid heightened Brexit uncertainty

currency-newsWeekly roundup: Pound fluctuates amid heightened Brexit uncertainty
The pound traded in a wide range last week as the currency was rocked by fresh Brexit jitters and concerns over the underlying strength of the UK economy.

Sterling initially got off to a solid start last week, rallying in upbeat trade and supported by optimism from Downing Street on the possibility of reaching a trade deal with the EU next month.

However, the pound’s rally quickly sputtered out following the publication of the UK’s consumer price index. While UK inflation soared back to 1% in July, many analysts expressed their scepticism that this could be maintained long-term.

A second attempt to rally in the latter half of the week was cut short again as the latest round of Brexit talks came to a close.

These showed that the UK and EU remain deadlocked over the terms of a post-Brexit trade deal, with GBP investors particularly unnerved by EU chief negotiator Michel Barnier’s suggestion that a deal ‘seems unlikely’ at this stage.

Further dragging on Sterling sentiment were the UK’s latest PMIs, as while the headline figures printed positively, GBP investors were dismayed as the survey’s highlighted the accelerating pace of job cuts.

Turning to this week, lingering Brexit jitters may continue to limit upside in GBP exchange rates amid growing fears the UK is facing a no-deal Brexit at the end of 2020.

Elsewhere the focus looks to be on a speech by Bank of England (BoE) Governor Andrew Bailey scheduled for the end of the week.

Bailey’s remarks are likely to be closely scrutinised by GBP investors, who will be looking for any hints from the Governor that the BoE is putting serious consideration into negative interest rates.
 
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)

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