IFX Market Report: Friday 30th October 2020

As we enter into Friday’s open GBPEUR has spiked this morning as the market becomes increasingly hopeful that an EU-UK trade deal might be agreed in November. President of the European Commission, Ursula von der Leyen noted yesterday the UK and EU are “making good progress but there are two critical issues: level playing field and the fisheries, where we would like to see more progress. She went on to add that at present “we are in very close contact on an hourly basis because the negotiations now have been intensified.”

On Thursday cable depreciated significantly over the session – testing the 1.2900 barrier. As the U.S. election swiftly approaches, GBPUSD opened the session at 1.2991, and closed notably below that, at 1.2914.

EURUSD was the focus of Thursdays trading session as the pair lost its grip on the 1.17 handle and slumped way down into the 1.16’s. The pair opened the day at 1.1732 and closed at 1.1660 on the day.

GBPEUR on the other hand saw limited price action in yesterdays session. The pair opened the day at 1.1074 and closed 2 pips above at 1.1076.

At 10:00 this morning we saw GBPEUR rocket into the 1.11’s – a direct result of markets today hoping a post-Brexit deal will be secured. It has also reported this morning that Germany is “deeply concerned” about the UK crashing out of the EU without a deal. Joerg Kukies, Deputy finance minister for Germany, said that Berlin risks losing access to vital funding provided by London if both sides cannot agree a deal before the end of the year. Kukies claims that “German corporates, for all that I can tell, rely massively on wholesale financing offered from the City of London, so in that sense we will have to maintain pragmatism, no matter what happens… But at the moment we are deeply conceived by the lack of progress in negotiations.”

On the data front, a busy day with a plethora of notable releases. For Germany we have both Retail Sales and GDP Growth Rate. From the Eurozone; Core Inflation Rate, GDP Growth, Inflation Rate and Unemployment Rate. Then this afternoon from the US we have PCE Price Index, Personal Income MoM, Personal Spending MoM and Michigan Consumer Sentiment.

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