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Market Update

• Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, Fed, GBP, No Deal, Prime Minister, Sterling, UK, Uncategorised
• February 7, 2020
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Sterling continues to extended losses on as concerns about negotiations between Britain and the European Union for a trade deal continued to create a sense of uncertainty.

Yesterday’s moves were part of a broader trend downward. The pound is 2% lower against the dollar this week after Prime Minister Boris Johnson said Britain does not accept the EU’s rules to strike a comprehensive free trade deal with the bloc at the start of this week.

Investors are nervous that British Prime Minister Johnson is taking a hard line in the trade talks with the EU, which need to be concluded before the end of the year to avoid a potentially disruptive break in trading relations.

British financial services firms will get no access to European Union markets after Brexit unless they agree to respect EU rules, French Finance Minister Bruno Le Maire said.

The euro fell against the dollar after data showing German industrial orders unexpectedly plunged in December. Orders for German goods fell 2.1% in December from November, the biggest drop since February causing the Euro to slide to a four-month low against the dollar.

The dollar also continued to rise after surging across the board the previous day after better-than-expected employment data underlined the relative strength of the U.S. economy.

Now the focus is moving to the ever-volatile U.S. nonfarm payrolls report due at 13:30 on Friday. Recent forecasts suggest that job creation has accelerated in January.