Boris Won’t Get Special Treatment. GBP The pound weakened at the end of last week over renewed fears over a no-deal Brexit….
European Commission President Jean-Claude Juncker stated that Boris Johnson would not be getting any special treatment, and that the deal agreed by his predecessor was the best and only Brexit agreement available.
Despite the fact that he also said that the European Union would analyse any ideas put forward by Britain. The market slumped in response to this statement.
The no-deal fear increased again as Johnson has reiterated his pledge to renegotiate the deal, and leave the European Union on the 31st of October, with or without a deal.
In order for an orderly Brexit to be in place, Johnson also stated the need for the Northern Irish backstop to be abolished.
This red line for Johnson coupled with Juncker’s response has meant that the pound is trading again at two-year lows.
The greenback strengthened on Friday after better-than-expected U.S results. GDP enhanced its yield attraction against rival currencies. U.S. GDP grew at an annualised 2.1% in the second quarter, above the forecast level of 1.8%.
This was attributed to a surge in consumer spending, counteracting the drag in exports and inventory levels.
Despite the good data, we are still expecting that the Federal Reserve will cut interest rates for the first time in more than a decade this week, a move that is widely seen as a pre-emotive one to protect the economy from the global uncertainties and trade pressures. Furthermore, U.S. money market futures have priced in cuts of 75 basis points by the end of the year.
Source : ETFWorld.co.uk