The Pound has fallen this week across nearly all of the major currencies largely as result of ongoing uncertainty with the Brexit negotiations. The fifth round of discussions will end this week but so far there is not “sufficient progress” to allow further discussion on a future trade relationship between Britain and the EU. One of the main reasons for the weakness in the Pound is because of the uncertainty that goes with this. The uncertainty with British politics and differing views from within the British cabinet are also seeing the mood change almost by the day creating additional volatility for sterling exchange rates across the board.
The GBP/EUR rate has now fallen from its recent peak which broke over 1.14 for and now sits at 1.1155. GBP/USD has also fallen lower although it has found support breaking back over 1.32 for this pair.
Brexit update expect later today
Brexit Secretary David Davies and his counterpart Michel Barnier are likely to make statements later today although a stalemate does appear to be in place. Any positive news about opening the door for future discussion could see the Pound rally but this is not likely to come any time soon. The earliest this may now happen could be at the start of 2018 which leaves us with a another 2-3 months of continued uncertainty and pressure on the price of sterling.
Will ECB and BoE speeches affect the GBP/EUR rate?
The Euro could see a particularly volatile day today with four key speeches from European Central Bank (ECB) members. ECB President Mario Draghi, Praet, Coeure and Lautenschlager will be all be making speeches today and any clues offered on future monetary policy and most importantly when tapering of the ECB’s asset purchasing scheme will commence could see a sizeable movement for Euro exchange rates.
In the UK Bank of England policy member Andy Haldane will also be speaking and any hawkish comments from him could see the Pound rally. Any suggestion that there is a strong chance the Bank of England will hike in November should help see the Pound rally.