Well finally some interesting news has caused some much needed GBP strength. We were all starting to get worried!
Sterling shot higher yesterday after EU’s chief Brexit negotiator Michel Barnier indicated that he was close to offering the UK a deal. Whether Britain accepts, is a different matter! Barnier said “we are prepared to offer a partnership with Britain such as has never been with any other third country.” He added, however, that the UK “must respect” core structures of the EU such as the single market. “Single market means single market,” he said adding that this was not negotiable.
GBP popped 1% higher across this news, breaking key levels particularly with USD. However be warned, anything to the contrary and all these gains can be wiped out as quickly as we saw them.
Given Turkey and Italian risk have been put on the back burner for the time being (but it will not be too long before those risks rear their ugly head again) – the submission of the Italian budget approaches. Hopefully the European market will start to creak again for you EUR buyers, retracing to more comfortable levels. Be warned, this will only happen after the Brexit deadline in March.
As per yesterday’s blog, data has smashed all expectations. No surprises there! Expecting it to be relatively quiet this end during the run up to the end of the week…
Have a good day