Sterling slammed as concerns of hard Brexit return…
The pound took a clobbering yesterday as PM Johnson confirmed he would write into law the inability to extend the post-Brexit transition period beyond 2020. This essentially means there’ll be only 11 months to strike a comprehensive trade deal with the EU which, if not reached, would default to World Trade Organisation terms. This raises the spectre of a harder than expected Brexit which consequently led to c.1.6% of losses across the board for sterling. Its worst day in over 5 months. Currencies have an awful habit of finding a way of doing the exact opposite to what the majority expect and is the reason why the currency markets are notoriously tricky to navigate at the best of times.
It’s another interesting day for economic numbers. Early in the morning we’ll observe a German IFO business sentiment index. From here on we’ll see 3 major economic region’s latest inflation readings: UK, EU and Canada. In the evening session there’ll be the most recent GDP report from New Zealand. We’ll additionally be keeping a close ear to the ground for developments on the Brexit front with news flowing thick and fast once again. It should be another revealing day from the pound’s perspective.
Written by Viv Savani. 8:25am, December 18th 2019
The details expressed in this market report are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Cornhill International Payments limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.