Yesterday saw another roller coaster for sterling as the Brexit saga took further twists and turns. This time focus was on the soft 15th October deadline the Prime Minister placed on obtaining a deal. Sources from the EU said they are willing to call the UK’s bluff after it was reiterated by the UK government that a deal needed to be outlined by this date.
The pound took a sharp fall lower after this headline flashed across various media outlets. The back and forth aggressive exchanges between the sides are wreaking havoc on the poor pound who, in turn, is being aggressively pushed around by traders and dealers alike. Negotiations are set to recommence today and no doubt it will be another super-volatile day for sterling. 2 key issues we will be listening out for are any developments on state subsidies to businesses and fisheries policy.
Last night’s Fed meeting minutes saw a central bank imploring the government for more fiscal stimulus. The Fed based their economic projections at the last meeting around the theme of another stimulus package. The meeting minutes made it abundantly clear that any failure to successfully agree a new round of aid would have significant consequences for the economy. The greenback was little changed after the release.
Today will see meeting minutes from the last European Central Bank announcement. However, as expected, most of the market’s attention will be on the US election and Brexit talks.
8:28am, October 8th 2020
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