Sterling had a good start to last week- this was unfortunately short-lived as GBPEUR exchange rates fell to the 1.19 area and GBPUSD fell as low as 1.28.

The reason for this was a mix of Brexit deal headlines and the fact that the U.S Dollar has now become a safe haven currency following effects of the Coronavirus outbreak. UK Data last week was actually pretty good compared to expectations, but unfortunately, the Pound could not regain any ground through Thursday and Friday.

Moving into this week- there aren’t really any key UK data releases that I expect would move the market- so I would say that Sterling is in pretty neutral territory.

The main thing I would be watching out for is any further headlines in regards to trade talks- anything negative will send Sterling lower, and any form of progress could see us back to 1.20. The only thing to keep in mind is in reality, no progress will be made until deadline day, and even then, I am expecting an extension on this deal.

It also seems that the BoE interest rate cut will not be immediate, slightly better data is enough reason to hold off on a cut for now, but I think a cut in 2020 is still realistic to stay in line with global agenda in regards to stimulus policy.

As ever, if you have any upcoming transactions please don’t hesitate to contact me.