The European Union will resume talks in the London later today with UK officials. The potential outcomes of these talks continue to be the main driver of GBPEUR exchange rates.
The two sticking points appear to be that of the fishing rights as well as competition issues between the two sides.
Boris Johnson has made signs that he is keen to move things forward but has also said he is still prepared to leave the European Union without a deal by the end of this year.
Michel Barnier and Lord Frost will continue the talks but are battling with time to get things in place before the end of 2020. With the UK having left the EU on 31st January it has to still follow the previous rules as part of the transition process.
If a deal is not agreed between the two sides then the default option for them both will be to work inside World Trade Organisation (WTO) rules. This is likely to push up prices for a number of imports and exports which is likely to impact upon both companies and consumers.
Over the weekend Boris Johnson was quoted as saying ‘I’ve always been a great enthusiast for a trade deal with out European friends and partners.’ The Prime Minister has also held talks with European Commission President Ursula von der Leyen and both have agreed that progress has been made.
GBPEUR exchange rates as well as pound US dollar exchange rates have started the week off trading above where they closed on Friday afternoon. Therefore, if we have any signs of further progress between the two sides then this could once again help the pound to improve against as number of major currencies.
However, as we have seen during the course of this year the talks have often been stopped in their tracks so expect to see further uncertainty with the currency markets until if/when the talks have concluded.
Later this morning Back of England governor Andrew Bailey will be making a speech about the latest happenings for the economy. Any signs that the central bank may be considering a change in monetary policy in the near future could cause some uncertainty for the pound.
GBPUSD update: Joe Biden to Become the New US President
Over the weekend it was announced that Democrat Joe Biden has finally won the US election. Donald Trump is still yet concede as although Biden has won the votes are still being counted. With Biden due to take power in January we could still be in for a period of uncertainty for financial markets whilst Trump remains in control.
The new President is looking to create a more positive outgoing America and has claimed it was ‘time to heal. Outgoing President Donald Trump is the first one term president since the 1990s but is still planning to launch a legal battle that the votes were allegedly rigged.
If you have a currency transfer to make and would like further information on how the above factors are likely to impact exchange rates, get in touch with me directly using the form below. I’ll be happy to respond personally and discuss your enquiry.