Foreign Exchange Daily Market Update 20/09/18

Thu, September 20, 2018

Pound strengthens to a two-month high, Even as Brexit Deal ‘Far Away.

Sterling continued its gains to a two-month high, as U.K. retail-sales data and broad dollar weakness, even amid signs a Brexit compromise remains far away.

The pound increased to earlier gains this week as data showed U.K. retail sales unexpectedly rose in August compared to July. Sterling rallied today even though leaders from both sides in the Brexit talks appeared to have struck a harder tone when they met face to face at a summit in Salzburg, the European Commission President said that the U.K. is still “far away” from reaching a deal.

All the talk leading up to the summit had been pound-positive, with reports that the EU will give the U.K. a favourable deal and drop some demands regarding the Irish border, However, we remain on the lookout for a “sudden” shift in tone from the EU and a not-so-favourable outcome for the Britain.

As retail sales gave sterling an added boost, it is a volatile time and other factors remain to sustainably drive the pound.

Sterling increased by 0.6% to $1.3217, the highest since July 17, also strengthening 0.3% against the Euro to 1.1282.

Data to look out today.   

14:15 EUR EU informal meeting of heads of states summit press conference.

• Sterling extends gain on unexpected increase in retail sales

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