Last week proved to be a distressing one for Sterling – due to a lack of progress on a post-Brexit trade deal, the Pound was the second worst performing major currency. On Friday, GBPEUR lost its all-important grip on the 1.12 handle and finished below 1.1150; as for cable, by Friday’s close the pair was able to keep itself just above the 1.3299 mark. Sterling’s performance this week will rest almost entirely on how Brexit negotiations will proceed.
GBPUSD opened Friday strong at 1.3360, but by midday had depreciated considerably, shedding 50 pips from the where it opened. The pair experienced increased volatility and just before the close had a brief spell in the 1.32’s, before picking itself up and closing the week at 1.3307.
As for GBPEUR, the pair also took a considerable tumble just after 10:00 (GMT) but unlike cable struggled to retrace its losses during the session. The pair opened shaky at 1.1206 and following more ‘disappointing’ news on Brexit was unable to gain any traction in the latter half of the day, closing at 1.1132.
EURUSD showed its reliance once again in Fridays session. After a discouraging session on Thursday following a relatively positive week, the pair was able to solidify its status in the 1.19’s. Opening at 1.1922 the pair went on to finally close at 1.1954.
On the Brexit front, not much has changed: although it is claimed that “better progress” has been made by both sides, the same problems remain. After French Foreign Minister Jean-Yves Le Drian accused the UK of “dragging its feet” and refusing to back down on the matter of fishing, UK Foreign Secretary Dominic Raab made clear Britain’s stance on negotiations. After speaking with the BBC, Times Radio and Sky on Sunday, Raab reiterated the government’s message that they will not concede on the tough issues that are currently stalling negotiations, despite being painfully close to the deadline.
Mr Raab asserted that “this is a very significant week, the last real major week, subject to any further postponement, we're down to really two basic issues”, fishing and the level playing field. Whilst France’s anger grows on the matter, Raab made clear that with “fishing there is a point of principle: as we leave the EU we’re going to be independent”, stressing the point that the UK has to be “able to control our waters”. The UK’s intent for a successful deal was still evident in the Foreign Secretary’s rhetoric, as he also claimed that “the bottom line is… we need to get a deal done over the next week or maybe another couple of days beyond that.”
