The pound traded well on the first day of the week as participants express a hope that compromise may be found in the coming weeks. GBPUSD rose to just shy of the $1.30 level, while GBPEUR maintained its presence above €1.10. The weekend’s telephone call between Prime Minister Johnson and EU President Ursula von der Leyen certainly went down well with the market and has raised expectations.
The next few weeks will be crucial for negotiations and consequently for the trajectory of the pound. Economic data will also have an impact on sterling but there’s no doubt, it will mainly be driven by Brexit-related headlines. In current trading conditions, automated market orders are a great way to capitalise on spikes either higher or lower. These normally come when important headlines flash across news terminals, which see very quick and aggressive price reactions. Should you wish to discuss this tool further, please do not hesitate to get in contact with your Cornhill FX dealer.
Today will see a large focus on President Trump’s return to the White House as his condition stabilises. On the data front, UK construction PMI will be released at 0930. We’ll also be monitoring speeches from Christine Lagarde (ECB President) and Jay Powell, the chairman of the Federal Reserve.
8:23am, October 6th 2020
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