Market news
09.11.2020, 13:37

GBP/USD to struggle to break above 1.3500 even if Brexit deal is agreed - MUFG

FXStreet notes that the pound has been one of the worst-performing G10 currencies over the past week although it has still advanced by around 1.4% against the US dollar. Broad-based USD weakness has helped to lift cable back above the 1.3000-level but it remains some distance below the high from the start of September at just below 1.3500. The prospect of a trade deal remains a positive potential catalyst for the GBP but doubts remain over the sustainability of any gains given weak UK fundamentals, per MUFG Bank.

“There is still a lack of progress in Brexit trade talks. EU Chief Brexit negotiator Michel Barnier has warned that ‘serious divergences’ remain over fishing and competition rules. It has dampened expectations for a trade agreement early this month... If Joe Biden is confirmed as the new President, it could increase pressure on the UK to finalise a trade with the EU. That prospect is likely helping to dampen downside risks for the GBP.” 

“The government has placed England back into a national lockdown until at least the 2nd December although it could be extended beyond. It has already prompted the BoE to forecast a renewed GDP contraction of 2% in Q4 and deeper contraction of -11% for 2020 as a whole. In response, the BoE and government have implemented further ‘co-ordinated’ stimulus. The BoE has significantly expanded QE by GBP150 B and the government has extended the jobs furlough scheme until the end of March. At the current juncture, market participants don’t appear overly concerned by downside risks from monetary financing fears judging by the relative stability of the GBP. The BoE is helping the government to borrow at record low yields.” 

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location