Today's market update from our Corporate team in Europe.
Following a relatively quiet start to the year, key market factors affecting GBPUSD could see this all change; the most anticipated being the Brexit deadline on Friday 31st January. The government has kept any information regarding the next stages of the Brexit deal restricted which has been reflected in a weaker pound over the last week. Even though there will be no dramatic changes to the UK straight away, it will be the start of a transition period with the withdrawal agreement being legally binding and ensuring that we ‘get Brexit done.’ Boris Johnson is said to use the Friday as a celebration and encourages the nation to do so as well with 10m commemorative 50p coins as well as Union Jacks lining Parliament Square.
Other economic data to look out for will be the Bank of England rate decision, coming out midday on Thursday. Dovish comments by Carney in the run up did has made a rate cut more likely stating that ‘cutting rates could be used on a risk management basis.’ Weaker economic growth at the end of 2019 would further support this decision. However, positive UK data out such as promising manager index for example has left the markets thinking. This will be Carney’s last chance as he will be replaced in March by Andrew Bailey who will have the task handling whatever decision is made.
Trump’s impeachment trial continues but we could get news out as soon as this week as to whether or not any real progress will be made. It seems the result of him being acquitted is almost a certainty and once announced he will use this as political ammunition to push through a second term in The White House. Even though this has played into Trump’s hands – since the start of the impeachment trials, polls have shown 50% of Americans now want Trump out of office which gives the Democrats confidence going into the next election.
At the time of writing:
GBPUSD – Trading above 1.30 at 1.3076
GBPEUR- Trading above 1.18 at 1.1853
EURUSD- Trading above 1.10 at 1.1032
The figures are based on the live mid-market rate, correct as of 08:30 GMT on 27/01/2020, 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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