Scrutiny of Brexit Withdrawal Bill Resumes

Xe Corporate Europe

January 8, 20203 min read

It seems the USD will be the net benefactor of moves yesterday and overnight.

The US produced a data set (being the ISM Non-manufacturing print – this is the Institute for Supply Management survey of 400 companies in utilities, mining, finance and banking, business services and construction for example and their orders). Expected at 54.5 the result was a big surprise to the upside arriving at 55. Any figure over 50 is a growth figure and so this means a much faster growth than anticipated. This could be an early sign of positivity from the sector from the agreement of Phase One trade negotiations between the States and China. The USD pushed rapidly against the beleaguered EUR but it appears likely to experience retardation around the resistance level – which is also the 55 day average so doubly significant – around the 1.1065 mark.

GBP could face a test in watching for any details from the meeting of Boris Johnson and, European Commission President today. Any details about how the trade negotiations go will likely provide increased volatility for the Pound as investors will be eagerly watching for indications of friction or otherwise. The context is important, too. Preliminary discussions with Australia (not a full trade discussion) regarding travel and immigration ended without real cohesion. Boris Johnson has had an (in)famous stance on rigidity for the end of the transition period afforded to Brexit at the end of the year and even amended legislation in order to stop any runover; a stance that drew critics and resulted partly in the sell-off of the GBP post-election.

The rates during the new year have seen some significant shifts in volatility.

Rates at time of writing below:

GBPUSD – 1.3142

GBPEUR – 1.1811

EURUSD – 1.1132

The figures are based on the live mid-market rate, correct as of 08:30 GMT on 08/01/2020, 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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