January 28, 2020 — 3 min read
Today's market update from our Corporate team in Europe
GBPUSD was seen to drop again since yesterday and is now sitting at 1.3028. The reasons behind this stem from uncertainty about the upcoming Brexit deadline, following comments from EU chief negotiator Michel Barnier. These were in regards to a hard border between Northern Ireland and Republic of Ireland. Boris Johnson said last week that trade between Great Britain and Northern Ireland would be ‘frictionless’ yet Barnier has come back to say this is ‘impossible.’ This is because the Brexit deal states that NI will still follow the EU customs code, meaning check on certain manufactured goods will still have to be done. This paired with the Bank of England rate decision has led to a lack of confidence in the pound amongst investors. Consensus sees a 50-50 chance of the BoE deciding to cuts rates, yet either way it is sure to cause volatility in the markets.
Over the last few days the dollar has shown some strength as a safe haven currency. The reasons for this stems from rising worries surrounding the Coronavirus, with the death toll now over 100 with over 4,000 confirmed cases. In terms of data coming out of the US, we have the annual budget come out of the Congressman Budget Office. In addition, Nondefense Capital Goods Orders will be coming out; consensus expects a 0% change compared to a previous 0.1% increase with a lack of news on the US-China trade war during Trump’s impeachment trial.
At the time of writing:
GBPUSD – Trading above 1.30 at 1.3028
GBPEUR – Trading above 1.18 at 1.1825
EURUSD – Trading above 1.10 at 1.1017
The figures are based on the live mid-market rate, correct as of 08:30 GMT on 28/01/2020, and are provided for indicative purposes only. Live mid-market rates are not available to consumers and are for informational purposes only. The rates we quote for money transfer can be selected via the page on our website ‘Live Money Transfer rates’.
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