Will the EU grant a Brexit extension?

Currencies Direct October 25th 2019 - < 1 minute read

  • Lack of Brexit progress continues to weigh on pound
  • Euro slips as German manufacturing decline worsens
  • CAD could dip if budget deficit widens

Pound under pressure as markets await Brexit deadline extension
The pound remained muted as MPs waited for the verdict of EU leaders on the matter of a fresh Brexit deadline extension.
Although the EU is widely expected to grant the UK an extension, the exact length remains up for debate.
Even if the EU offers a multi-month extension, the prospect of yet more uncertainty could still see the pound fall further out of favour.
Euro looks for support from German business confidence
As the German manufacturing sector remained firmly within contraction territory in October worries over the outlook of the Eurozone’s powerhouse economy weighed on the euro yesterday.
However, the single currency may find support this morning if the latest German IFO business sentiment survey shows an improvement on the month.
Signs of greater confidence among German businesses could offer EUR exchange rates a leg up, in spite of lingering worries over the economic outlook.
Widened budget deficit may drag on Canadian dollar
CAD exchange rates could come under pressure this afternoon if data shows that the Canadian budget deficit widened in August.
Such an outcome would highlight the difficulties still facing the domestic economy, leaving the Canadian dollar exposed to selling pressure.
That being said, in the wake of Tuesday’s general election result the impact of this old budget data could prove limited.
Upcoming Data:
Friday, 25th October 2019
09:00 EUR German IFO Business Sentiment Survey
15:00 USD University of Michigan Consumer Sentiment Index
16:00 CAD Budget Balance

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