Panic buying?

Morning all

Long time since you’ve all had an update but the news is depressing enough without us reinforcing it every week, so we’ll try and keep it light!

GBP

Massively under pressure this morning as rising COVID cases prompt Britain to consider a second national lockdown. By 8am this morning it was already down 0.3 percent against most of the major currencies. The UK already has the biggest official COVID-19 death toll and whatever your personal thoughts are about the virus it is fair to say (unless you’ve had the virus), is the worst effect it’s having is on economy. Whether you believe the stats are accurate or your views on how the virus should be controlled is really a whole new argument and really why the uncertainty is killing the market.

In the spirit of “keeping it light” we haven’t even mentioned Brexit yet! The prospect of a chaotic end to the transition period in December is a real one which is why we haven’t made a full recovery since 2016 in terms of GBP strength. If we aren’t careful and both COVID and Brexit are compounded together come the end of the year we could be seeing some record lows across the board. No deal looming?

I’ll leave the negative interest rate chat from the BoE till later in the week…

USD

Very much led by Trump at present (as always!) and the fact that interest rates are pinned to near zero after the federal reserve gave quite a positive talk on last Wednesday. Again all very much driven by sentiment at the moment with a lot of focus currently surrounding the elections on the 3rd November. Another 4 years of Trump? Polls suggest Biden is just ahead but we all know how accurate they are!

EUR

Heavily interlinked with the Brexit negotiations ahead. Additionally the Europeans will have to look at their individual relationship with China again at the EU summit coming up. Could be an avenue to forge a new trading relationship without us?

Sorry, pretty heavy all in all!

Have a good start to the week

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