Foreign Exchange Daily Market Update 03/09/18

Mon, September 03, 2018

Sterling could face months of volatility.

The next few months could be a roller-coaster a for the pound.

Sterling’s volatility left analysis scratching their heads last week, as Michel Barnier the Chief EU Negotiator promise to offer the U.K. an unprecedented partnership which sent the pound soaring more than 1% even though he had said it before. With both sides warning of the risk of no deal, the markets are going to become increasingly sensitive to Brexit headlines.

While a no deal seems unlikely, it’s a prospect that is pulling sterling down. U.K. lawmakers return this week from a summer recess with little progress made. Any proposed Brexit deal would have to be voted on by parliament before the U.K. leaves the EU in March

Headlines will keep on coming. As Dominic Raab the U.K. Brexit Secretary said that the October deadline for negotiating a deal may have to be pushed back, there is increasing talk of an extra emergency U.K.-EU summit in November, as well as the two meetings already scheduled for October and December.

If Britain does get a deal by the end of the year, sterling should rally. While most see bad news as having more of an impact than good news. A no-deal scenario would see a sharp move downwards, while any deal aggreged would only result in a gradual upwards move as details would still have to be worked out.

The pound fell to $1.28876 today from $1.3015 against the dollar. Sterling fell from €1.1147 to €1.10947 against the Euro.  

Data to look out today.   

Not much data out today.

The US is closed today due to National Holiday

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KBRFX was mentioned in the Essex Chronicle for the top 100 companies by turnover in Essex http://www.essexchronicle.co.uk/100-Essex-businesses-revealed-annual-survey/story-25140555-detail/story.html

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