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Sterling shrugs off GDP hit as Brexit and dollar weakness dominate

October 9, 2020

By Elizabeth Howcroft

LONDON, Oct 9 (Reuters) – The pound was steady against the U.S. dollar on Friday, brushing off worse than expected UK growth data as investors became more optimistic about a Brexit deal being reached ahead of a key European Council summit next week.

The pound has been volatile this week on contradictory headlines about how much progress has been made in Brexit negotiations. Both sides have said a deal is still possible.

“The last two weeks have seen some brutal whipsawed price action in sterling,” said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets,

“There is going to be that ongoing susceptibility to Brexit headlines but the mood music still seems to be reasonably positive,” he said, adding sterling could test the key $1.30 level again if the risk environment remained constructive.

At 1034 GMT, the pound was at $1.2937, little changed on

Sterling edges up against dollar but falls versus euro; Brexit talks in focus

October 9, 2020

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Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

LONDON, Oct 9 (Reuters) – Sterling edged up against the dollar but fell against the euro after worse-than-expected UK GDP data, while investors focused on Brexit negotiations where the “mood music” was seen to have improved.

Britain’s GDP rose 2.1% in August – the slowest increase since the economy began to recover in May from its record slump. Much of what growth occurred was down to the government’s one-off restaurant subsidy scheme.

The data had limited impact on the pound, which was in its third consecutive day of gains against the dollar and only slightly down versus the euro.

Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets, said that the GDP data, which calls into question the idea of a V-shaped recovery, had little effect on the market since it was already

Sterling weaker vs euro, focus remains on Brexit

October 5, 2020

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LONDON (Reuters) – Sterling fell against the euro on Monday, although losses were limited as most analysts said they expect Britain and the European Union to soon conclude a Brexit deal.

FILE PHOTO: Queen Elizabeth II is seen with printed medical masks on the Pound banknotes in this illustration taken, March 31, 2020. REUTERS/Dado Ruvic/Illustration

Versus the broadly weaker U.S. dollar, the pound rose.

British Prime Minister Boris Johnson and the head of the EU’s executive, Ursula von der Leyen, agreed in a phone call on Saturday to step up Brexit talks to close “significant gaps” barring a new trade partnership.

Both sides said they have made some progress but not achieved yielded a breakthrough.

The EU must show “more realism” if it wants to bridge differences with Britain on fisheries, a spokesman for Johnson said on Monday.

Johnson does not want the Brexit transition to end without a new

Sterling up over 1% as traders see hope of avoiding cliff-edge Brexit

September 28, 2020

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LONDON (Reuters) – The British pound rose more than 1% on Monday on hopes that Britain could secure a Brexit trade deal with the European Union by October or at least avoid a cliff-edge exit from the bloc.

FILE PHOTO: British five pound banknotes are seen in this picture illustration taken November 14, 2017. REUTERS/Benoit Tessier/File Photo

The EU and Britain kicked off a decisive week of talks on Monday but cautioned that a deal was still some way off.

A final agreement must be reached by the end of December but both sides have set a preliminary deadline for next month as it will take some time to sign off any deal.

The pound’s gains were fuelled by an EU diplomat saying last week that “the mood music was a bit better” after Britain’s Brexit supremo Michael Gove expressed confidence about securing a trade deal.

“If discussions this week

Sterling jumps more than 1% as traders see hope of avoiding cliff-edge Brexit

September 28, 2020

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By Olga Cotaga

LONDON, Sept 28 (Reuters) – The British pound soared more than 1% on Monday on hopes that Britain could secure a Brexit trade deal with the European Union by October or at least avoid a cliff-edge exit from the bloc.

A final agreement must be reached by the end of December but both sides have set a preliminary deadline for next month as it would take some time to sign off any deal.

The European Union and Britain start a decisive week of talks on Monday.

An EU diplomat said last week that “the mood music was a bit better” after Britain’s Brexit supremo Michael Gove expressed confidence about securing a trade deal.

“If discussions this week lead to a break through in fisheries and level playing field then we could hopefully land an agreement by Oct. 15,” Kenneth Broux, head of corporate FX at Societe

Sterling traders not panicked yet by new Brexit brinkmanship

September 28, 2020

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By Tommy Wilkes, Saikat Chatterjee

LONDON (Reuters) – Britain may be heading for a no-deal Brexit in three months, but among traders in London the feeling so far is one of deja vu rather than a panicky rush to dump UK assets.

FILE PHOTO: Pound coins are placed on broken glass and British flag in this illustration picture taken January 31, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

After Britain threatened to ditch parts of its European Union divorce deal this month, markets are pricing in a 40%-45% chance of exiting the EU trading bloc without any alternative arrangements at the end of 2020. Some banks see it higher.

Yet as the four-year political crisis between London and Brussels enters what may be its final stretch, investors and companies are not stampeding as heavily to sell sterling or hedge against volatility as they did when no-deal Brexit risks intensified in the past.

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