While the Pound is still showing signs of strength due to an upbeat market sentiment, fears surrounding Brexit have kept “GBPUSD price action within the 1.3700 – 1.3800 range”. UK Brexit Minister David Frost “conveyed his dissatisfaction” yesterday as he claimed the EU’s current proposals to reform the Northern Ireland Protocol “don’t go far enough”. Frost went on to add that he isn’t sure the EU “would quite deliver the kind of ambitious freeing-up of trade between Great Britain and Northern Ireland that we want to see” but Frost and his team are “trying to test… whether they could find the basis to go further than what they have put on the table”. Having set a December deadline for the two sides to find a solution, Frost argues that while talks have “been quite constructive so far” the gap between the EU and UK on making an agreement remains “significant, and there is a lot of working to go through”.
Despite a stronger Dollar and fresh Brexit woes, GBPUSD was able to limit any significant downside moves and the pair closed close to where it started the week. Cable opened the session at 1.3788 and closed the day at 1.3771.
GBPEUR in contrast was able to enjoy some decent upside on Monday. The pair started the session at 1.1827 and surpassed the 1.1850 mark to close the day finally at 1.1862.
EURUSD on the other hand suffered yesterday as the divergence of central bank policy forced the pair lower. EURUSD opened the session at 1.1658 and dropped almost 50 pips on the day, finishing the day at 1.1609. It should be noted that due to the prospect of higher interest rates for different currencies, this week’s calendar will be “critical as it may set the stage for many weeks to come”. Thus far, “the rebound in the Greenback has come at the expense of the Euro, the Japanese Yen and the Swiss Franc in the main”.