It was an interesting week for Pound-Euro exchange rates with rates reaching as high as 1.1275 on Wednesday before dipping to 1.1150 by Friday- and also GBPUSD reaching 1.33 before falling back to the 1.31 area by Friday close.
The next Brexit deadline is supposed to be the 19th November, and at this point it (still) looks like not enough progress has been made, so I expect that this could be extended again into December. It seems both sides definitely want a deal, and now Dominic Cummings has exited Boris’s team the chances of a No Deal Brexit have become a lot slimmer overnight.
I think it was expected by us all that Brexit negotiations would continue right until the deadline, however there are now chances that things could get extended into 2021- with Covid getting worse around Europe and the UK, maybe Brexit will not be as much of a priority? Especially if a vaccination begins to rollout in December…
That does not leave us in a great position when looking at Sterling exchange rates, as Brexit really is the key factor on movement and we are currently in an interesting position. A Joe Biden win has lifted Cable to 1.33, and also seen GBPEUR rise, but as we enter December markets we do expect things to be a little more subdued as we approach Christmas, but this will all hinge on Brexit.
In other news, The Government has finished their 201 day boycott of GMB (Piers Morgans morning show) and Matt Hancock will be appearing on there on Monday morning- I personally find this is interesting that it has happened following Dominic Cumming’s departure, but will definitely be worth a watch while I have my coffee.
So what are we looking for this week? In short, Brexit headlines. The Pound will be pretty sensitive to any news on negotiations so if you are looking to make a payment please keep this in mind- if Thursday results in an extension, we may see a slight bit of weakness in GBP initially as it is another deadline that has passed without a deal, though it is positive as it means both sides want one, the fact it hasn’t materialised yet is still negative.
This week will be the test of Sterling confidence, and I am not expecting a quiet week.