The pound is remaining resilient and trading steady as unofficial Brexit rumours continue to plague the headlines. Despite supposedly both the EU and UK being on the “cusp of a trade deal”, nothing has been confirmed yet with talks set to resume Thursday.
GBPUSD started the week very strong trading above the 1.3350 level, opening Monday at 1.3354. As the day progressed the pair held firm, but just before 16:00 the pair to a sharp turn to the downside and found itself back in the 1.32 range – falling as low as 1.3264. Thankfully for the Pound, cable was able to retrace some of its loses before the close, finishing the day at 1.3298.
In contrast, GBPEUR had a less volatile day and was able to sustain itself above 1.12 for the whole of Mondays session. The pair opened at 1.1251 and closed just below that mark at 1.1244.
It has been reported in the Telegraph that even if some form of a deal is struck, trade negotiations “will be a regular part of British life, continuing long into the future after the trade agreement” is agreed. The article went on to say that despite Britain escaping the EU “it can never escape negotiating with it. Even a no-deal Brexit wouldn’t prevent the unavoidable future of talks with the EU, and talks about talks with the EU… Brussels, which is always comfortable playing the long game, is reportedly considering asking for a 10- to 15-year review clause in the trade deal and fishing agreement.”
After finding some traction towards the latter end of last week, EURUSD has made some gradual losses starting this week. The pair opened above the 1.1850 handle on Monday at 1.1869, but was unable to hold that position, and finally closed at 1.1826.
On the data front, from Germany we have the GDP Growth Rate for Q3, followed by the all-important Ifo Business Climate data. GDP is forecasted at -4.3%, while the forecast for Novembers Ifo is 90.1. Kicking off the afternoon we have a speech from ECB President Christine Lagarde, followed by US CB Consumer Confidence and speeches from Fed members Bullard, Williams and Clarida.
