After regaining the 1.3800 handle on Thursday, Cable experienced some serious push back on Friday as the pair fell to its weakest level since mid-October due to renewed Brexit concerns and broad-based Dollar strength. Last week a British fishing vessel was “boarded by the French authorities and ordered into the French port of Le Harve while legally fishing for scallop in French waters”. The British owner of the detained vessel said he was being used as a “pawn in an ongoing dispute between the UK and France on the implementation of the Brexit Fishing Agreement”; whereas France’s Europe Minister, Clement Beaune said this move was an exhibition of “strength”. Reports this morning show that Foreign Secretary Liz Truss has set a 48-hour deadline for the fishing dispute with France to be resolved before the UK moves ahead with legal action. Truss claimed that “the French have made completely unreasonable threats, including to the Channel Islands and our fishing industry, and they need to withdraw those threats”. She added that “if somebody behaves unfairly in a trade deal, you are entitled to take action against them and seek some compensatory measures… that is what we will do if the French don’t back down”. If this dispute continues to pose as a persistent issue, it’s likely we could see more downside for Sterling.
As selling pressures mounted, GBPUSD struggled in the Friday session. Cable opened the day at 1.3789 and closed the week at 1.3684.
GBPEUR in contrast was able to make gains on Friday, ending the month in a strong position. The pair started at 1.1815 and was able to close 2 pips off 1.1850 at 1.1848.
Renewed interest in the US Dollar led to a day of big losses for EURUSD on Friday. The pair opened at 1.1670 and dropped below 1.1550 on the day, closing the month at 1.1549.
At 07:00 this morning German Retail Sales came in at a disappointing -0.9% despite being forecasted at 1.8%. At 09:30 the UK will publish its final Manufacturing PMI number for October. Then from across the pond, at 13:45 Octobers Markit Manufacturing PMI will be published, followed by the ISM Manufacturing PMI at 14:00.