Pound retreats on renewed Brexit doubts
[vc_row][vc_column][vc_column_text]With renewed uncertainty over the chances of a UK-EU post-Brexit trade agreement, the appeal of the pound diminished.
Demand for the euro picked up, meanwhile, thanks to the upward revision of the finalised third quarter German and French GDP figures.
Growing signs of sustained labour market weakness put some pressure on the US dollar, especially as US markets closed for the Thanksgiving holiday amid upbeat market trade.
Evidence of Chinese industrial recovery helped to shore up the Australian dollar as market risk appetite continues to strengthen.
Pound limited as doubts mount over Brexit
Growing doubts over the ability for the UK and EU to reach a trade agreement before the end of December limited the appeal of the pound.
Brexit uncertainty grew as senior officials from the UK and EU both raised concerns over the chances of a trade deal as the EU’s chief negotiator, Michel Barnier, arrived back in London for face-to-face talks at the weekend.
Meanwhile, as the UK government announced its intention to return to a tier system once the second national lockdown ends, this failed to encourage much optimism among investors.
With Brexit-based uncertainty and the impact of the Covid-19 crisis looking set to weigh on the economy for the remainder of the year, there was limited potential for pound gains.
November’s finalised UK manufacturing and services PMIs may put fresh pressure on GBP exchange rates this week.
Confirmation that the service sector experienced a major loss of momentum on the month would add to fears that the fourth quarter GDP will prove negative.
Unless there is a significant positive revision to the PMI, this looks set to keep the pound biased to the downside in the days ahead.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]
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* Information courtesy of Currencies Direct
Currencies Direct is one of Europe’s leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we’ve maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering “business to business” solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.
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