TGIF! Lets get straight into it…
7 weeks lows and I really hope that this is the bottom (for now) against the USD and 3 week lows verses the EUR as doubt grows about whether the UK and the EU can clinch a Brexit deal. Bloomberg has reported this morning that Brexit talks are on hold because Theresa May’s cabinet was not close enough to an agreement on how to proceed for the negotiations to restart. Whilst we are being negative, don’t expect interest rates to change next week; further GBP weakness!
ECB President Mario Draghi acknowledged that the turmoil in global markers has raised the risks to the Eurozone economy, but reiterated that the ECB remained on track to wind up its asset-purchase program in December. With the EUR and European stock markets heading lower this week, Draghi tried to put a positive face on recent developments. He discussed the Eurozone’s “broad-based” economic growth and said he was confident that the Italian government would reach an agreement with the European Commission, which has rejected Italy’s budget since it raises the country’s deficit. However, Draghi acknowledged that the Eurozone economy has softened, and also noted the risks from the global trade war and the volatile political climate in Italy.
Incredible run, 10 week high against all the majors! Expect a strong GDP reading this afternoon which will invariably strengthen USD further…