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Weekly roundup: Pound rocked by Brexit uncertainty

currency-newsWeekly roundup: Pound rocked by Brexit uncertainty
The pound opened last week session on some strong footing, as Sterling’s slump the previous week made it more attractive to investors.

But the pound’s upside momentum quickly faded, amidst heightened Brexit uncertainty, with the UK government’s threats to trigger Article 16 of the Northern Ireland protocol fueling fears of a potential UK-EU trade war.

Exerting additional pressure on Sterling sentiment was the publication of the UK’s latest GDP release. Preliminary figures for the third quarter revealed domestic growth slowed from 5.5% to just 1.3%, missing forecasts for a slightly stronger expansion of 1.5%.

However, the pound was able to claw back some ground at the very end of the week, amidst fresh Brexit optimism, following an apparent ‘change in tone’ from the UK’s negotiating team.

So far this week, GBP exchange rates have trended broadly higher, being bolstered by the release of the UK’s latest jobs report, after it revealed domestic unemployment fell to a one-year low of 4.3%.

Sterling may extend these gains as the week goes on, with the UK’s consumer price index expected to report domestic inflation surged to 3.9% last month, which could bolster the odds of the Bank of England (BoE) hiking interest rates next month.
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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