IFX Market Report: Thursday 30th September 2021

The Pound continued its bad run of form on Wednesday as rising COVID-19 infections and renewed Brexit concerns stunted any possible upside. The UK yesterday recorded a further “36,722 new COVID-19 infections and 150 more coronavirus-related deaths”.

In regard to Brexit, the French government have accused Britain of “taking French fishing hostage” after the UK refused three-quarters of licence applications for small boats in British waters. This consequently led to threats “that fishermen could block the Channel Tunnel”. French Sea Minister Annick Girardin has told French newspaper Le Monde that this move represents a “new refusal of the British to apply the conditions of the Brexit accord”. With France’s Europe Minister Clement Beaune clearly stating the French will “not hesitate to take retaliatory action”, the risks are high that another fishing war in the Channel is possible. Member of the French Parliament Jean-Pierre Pont has also noted the British should “be warned”, adding that “since the British are refusing to honour what they signed… French fishermen… may be obliged, after nine months of useless patience, to envisage ways to retaliate against the UK… for example, by blocking ports or the entry of lorries towards the UK through the tunnel”.

Cable made another substantial loss yesterday as the pair fell from the 1.35 to 1.34. GBPUSD opened the session at 1.3535 but was only able to close at 1.3438.

Sterling’s losses against the Euro were not as drastic thankfully. GBPEUR started the day at 1.1592 and finished not far off at 1.1574.

After reaching lows at the beginning of the week, EURUSD started the London session relatively strong, trading at 1.1676. Downside pressures however forced the pair to the downside, finishing the day finally at 1.1613.

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