I’m ready for the question, Noel:
Dominic Raab’s last minute scramble over to Brussels this weekend left investors in great anticipation, perhaps even expectation, of a Brexit deal this week. Michel Barnier’s tweet yesterday afternoon undermined those expectations sending Sterling tumbling during the Asian open yesterday evening. The EU’s chief negotiator wrote:
Sterling crashed out of the 1.32s against the Dollar overnight, however, recovered ground throughout this afternoon. As May addressed the Commons, Sterling proved to be a choppy market to navigate, however, ultimately gained around one quarter of one percent as the PM’s optimism persuaded traders to award the Pound with value. The Euro was also hampered by the disappointing Brexit announcement on Sunday, with the European single currency losing its own battle against the Dollar and running out of steam just short of the 1.16 mark. Having unsuccessfully retested this range again this afternoon amidst a weaker Dollar, EURUSD closed the European session at 1.1590. European leaders gather in Brussels on Wednesday in a pivotal event for Brexit. Sentiment surrounding the event remains positive, with French President Macron promising in Paris this afternoon to continue “technical talks” right up to the wire. Global tension between Saudi Arabia and the US grew today as the oil titans squabbled on the political stage. Amidst a strong “risk-off” strategy, Gold rallied as the Dollar and US equities declined.
Discussion and Analysis by Charles Porter