Post date: 23/02/2018 16:00
Brexit talks have made progress this week with the pound received a boost on Tuesday as it was made aware that the European Parliament is debating a special arrangement for the UK to gain access to the Single Market. The UK would benefit hugely from remaining in the Single Market, this is the free trade and harmonised area of regulation within which EU members can trade. Theresa May and the cabinet big hitters, such as Boris Johnson, met, on Thursday, to try sort out the governments final Brexit position. They believe the transition period being extended till the end of 2020 isn’t to delay Brexit, this is to ensure we avoid any damaging cliff edge and providing clarity that businesses need.
At the beginning of the week, in the absence of any key data releases, political news, or monetary policy developments, the Euro traded largely flat against all other European currencies, and rallied in a volatile fashion against the Dollar in line with all other major world currencies. Yesterday we had the ECB Monetary Policy Meeting Accounts at 12.30 which contains an overview of financial market, economic and monetary developments, everything was left on hold hence why the EUR saw little movement.
The pound had been saved by the weakness in the dollar and this had helped the GBPUSD pair to climb, it looked as though the pair was going to rally. But just as the fall in the dollar did not have much of fundamentals or economic data weakness to back it, the rebound in the dollar also came through without much of the fundamentals backing it. Also investors have been holding off due to ongoing Chinese New Year, as well as a US holiday too. A lot of data has come out from the US this week, most of which has come out better than expected including; Market PMI, Continuing Jobless claims and Initial Jobless Claims.