Market Update
- Posted by currencies in Bank of England, Bremain, Brexit, Currency, Dollar, Economy, EUR, GBP, Mark Carney, Prime Minister, Rate Cuts, Referendum, Retail Sales, Sterling, UK, Uncategorised
- February 20, 2020
- No Comments
The Pound has retraced against the Euro proving that the rate is uncomfortable above 1.20 against the Euro and 1.30 against the USD.
Due to ongoing concerns that the EU and the UK are moving further apart within the trade talks. Many analysts have mentioned that we cannot rule out a no-deal Brexit by the end of this year if the UK and EU are unable to strike a permanent trade deal.
The GBP has gained a staggering 10% since August 2019 where the markets had pretty much rule out a no-deal Brexit.
Gains then accelerated after the General Election in December where the Conservatives saw a majority. UK economic data including jobs data, PMI and inflation have improved since the general election and has subsequently lead to the possibility of a rate cut being reduced by markets.
All eyes will now be on the budget presentation released on 11th March. A sizeable increase in spending could well aid the Pound.
Rishi Sunak, the new Chancellor of the Exchequer confirms the Prime Minister is looking to increase spending. However should Sunak opt to run a modest increase in spending as was expected by Sajid Javid; markets may be disappointed and sell the GBP leading to further weakness.
Leave a Reply