[vc_row][vc_column][vc_column_text]Last week saw some major pound volatility as investors reacted to an eventful week in Brexit negotiations.

The pound opened this week trading lower again, with GBP/EUR trending narrowly around €1.1317 and GBP/USD having slumped to US$1.3340.

Sterling movement is likely to be more data driven this week due to a number of major domestic data releases, however Brexit will still remain on the minds of many investors as EU leaders vote later in the week on whether to allow negotiations to move to the second stage.

“What followed was a turbulent week of hasty negotiations between the UK government, the DUP and the Irish government as Theresa May rushed to salvage the deal before the EU summit in mid-December.”

 

Pound fluctuates as Brexit deal finalised

It was a rollercoaster ride for the pound last week, with the currency being met by the ups and downs that came with a hectic final week of negotiation over the UK’s exit agreement with the EU.

The pound initially surged at the start of last week’s session as, following a busy weekend of negotiations, it appeared that the end was in sight for the first round of Brexit talks, with only the issue of the Irish border to be solved.

However, Sterling sentiment quickly retreated again as the DUP rejected proposals for the Irish border, effectively torpedoing a deal.

What followed was a turbulent week of hasty negotiations between the UK government, the DUP and the Irish government as Theresa May rushed to salvage the deal before the EU summit in mid-December.

This resulted in considerable Sterling volatility, especially in the middle of the week when it looked like a deal might not be reached.

The pound found its feet overnight on Thursday as an accord was reached, but these gains proved to be short lived as the EU announced that trade talks would not begin until February at the very earliest.

Sterling has spent the first half of the week struggling and may extend losses if the gap between inflation and wage growth is shown to have widened again.

The Bank of England (BoE) will also meet this week, with Sterling sentiment suffering a blow if the bank signals that interest rates are likely to remain unchanged in 2018.

 

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* Information courtesy of Currencies Direct
The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. This article was written by Currencies Direct.[/vc_column_text][/vc_column][/vc_row]