Beyond Currency

"It is going to take a very long time before the UK economy fully recovers from Covid-19, but no matter how long that period is, at the end of it the UK will still have left the EU and the circumstances of its departure will echo for a generation.

Although most people are sick of hearing about it, the UK’s £900 billion trading relationship is crucial to the country’s economy despite the medium-term issues being created by the pandemic.

While everything is on the table as far as EU Chief Negotiator Michel Barnier is concerned, the most important factor over the past couple of weeks is that his opposite number, David Frost told him not to come to London for talks last week unless something fundamental had changed. "

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The increasing concerns over a fresh national lockdown, the cost of Coronavirus so far and the far from certain departure from the EU are weighing heavily on the UK economy.

Having increased the support given the areas of the UK who are forced into Tier Three of the new regional lockdown measures, the Chancellor is being forced into considering the effect on those regions who have been raised into Tier Two, while facing questions over how the country is going to pay for the borrowing which has pushed the debt to GDP ratio up to around 100%.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Chancellor of the Exchequer Rishi Sunak improved the support being given to businesses and workers affected by the Covid Pandemic by almost doubling the Government’s contribution.

The move was largely welcomed on all sides although the Parliamentary Opposition believe that it is too little too late.

In a press conference also attended by the Prime Minister and Chief Medical Officer, Sunak supported the practice of regional lockdowns despite criticism from various sections of the media.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Chancellor of the Exchequer Rishi Sunak has exhibited a degree of flexibility not usually seen in this Government by agreeing to revisit his latest plans for financial support for those returning to lockdown.

This is a response to the arguments of Manchester Mayor Andy Burnham who refused to allow his City to return to lockdown without a proper support package in place.

Ultimately, the Prime Minister asserted his authority and placed Manchester in Tier 3, but Burnham’s actions have prompted Sunak to act.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"London and Brussels continue to demand that the other give ground in order to agree a trade deal while Boris Johnson stood firm and placed Manchester under the highest level of local lockdown in order to try to get cases of Covid-19 under control.

It seems as far as Brexit is concerned Johnson and his advisors are unable or unwilling to make the final gesture and confirm that talks are at an end and the UK will end the transition period of December 31st with no deal in place. Apparently, the door to a deal is still ajar.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Prime Minister Boris Johnson repeated his assertion that without a significant change of heart from Brussels there is no basis for talks to resume.

The call between the negotiators was said to have been constructive but that is simply political speak for no progress.

Meanwhile, the UK prepares for an Australia style departure which means it will begin its new independent life without a trade deal with its biggest partner. "

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"Talks between the UK and EU ended last week with no agreement over a future relationship between the two and UK Chief Negotiator Lord Frost claiming that Brussels had no genuine interest in finding a solution.

There are two areas over which there is still a significant disagreement between the two sides demands, fishing rights and state aid.

Following the break-up of talks, the EU Summit which was supposed to ratify the talks ended in confusion.

Boris Johnson commented that the talks are at an end and there is no point in EU Chief Negotiator Michel Barnier visiting London this week without a significant change of heart on the part of the EU. It appears that as things stand, the UK will be dealing with Brussels on WTO terms from January.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"There was a sense of deja-vu yesterday as an EU Summit began in Brussels with the intention of ratifying an agreement that had been reached between the two parties over Brexit. Since no agreement has been reached it felt a lot like last November was being repeated.

Both sides expressed disappointment over the others failure to compromise. UK Chief Negotiator, David Frost said that he felt that Brussels was no longer serious about finding a solution to the remaining issues. The most likely outcome of what was supposed to be the defining week for Brexit is that talks will continue well into next month.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The pound had its most volatile day in terms of its range for over a month yesterday as the Government’s handling of the second wave of Coronavirus came in for some heavy criticism while Brexit negotiations provided a backdrop of uncertainty.

It is now fairly certain that the Prime Minister ignored the advice he was given by his scientific committee about a circuit breaker lockdown to arrest the spread of the virus. It was suggested by SAGE members that a complete lockdown for two or three weeks would see infection rates be brought back under control and provide a level playing field across the entire country."

Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.

"The new lockdown regulations announced by the Prime Minister have been criticized from just about every corner as the balance between protecting the population while defending the economy has seemingly failed to be met.

With infections, hospital admissions and fatalities all rising exponentially, the placing of just one area of the country in the new tier three is difficult to understand. Opposition Parties appear to have evidence that the scientific evidence and advice has been largely ignored.

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Beyond Currency Market Commentary:

Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.