Beyond Currency

"Prime Minister Boris Johnson’s self-inflicted deadline for a Brexit deal to be agreed expires on Thursday, while later today he will announce further restrictions that will be made to try to halt the spread of the virus.

It is expected that he will announce a three-tier system based around the number of infections per 100k of population with areas in the north of the country likely to see the most significant constraints.

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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.

"Following Scotland’s move to radically increase restrictions to deal with an increase in infections from Covid-19, England looks likely to follow its lead and introduce a three-tier system of restrictions next week.

The hospitality industry will be decimated by lockdown measures similar to those introduced by the devolved Scottish Assembly while new data suggests that high streets in England could see 75% of smaller family owned independent shops close.

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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.

"An agreement about the future trading relationship between the UK and EU is beginning to look more likely although the one outstanding matter is an issue that has been around for decades.

The ability of the EU’s fishing fleet, particularly those from France to fish in UK territorial waters, has often been a source of controversy and as is often the case, this time it is exacerbated by politics.

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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.

"It is unclear whether the EU negotiating team actually believes that Johnson will pull the plug on negotiations on October 15th as he has promised, but it does appear to continue to hold their attention.

Talks have been extended and are now due to finish this week. Rumours were flying at lunchtime yesterday that the EU was admitting to some progress having been made.

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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 appears to be shouldering the burden of the UK's economic recovery from Covid-19 almost alone.

While the majority of the Government’s resources are being channelled into fighting the second wave, Sunak is trying to ensure that there is some form of an economy to return to once the infection rate is under control.

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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.

"It is hard to be optimistic about the economy while it faces the added headwind of Brexit. Official negotiations came to an end last week without an agreement being reached.

The official statement that both sides agreed to summed up the entire process. The same two or three differences remain with neither side prepared to go the extra mile. Each blames the other for grandstanding driven by a belief that they believe they are in a stronger position than their opponent."

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.

"Just about every aspect of UK society is in confusion.

Whether it is the Government’s response to Covid-19, the public understanding of the rules, Brexit, the economy or negative rates It is becoming impossible to follow what is happening and each has a knock-on effect for the rest.

Track and trace and testing capacity are nowhere near where they should be with people having to travel hundreds of miles to get a test. Local lockdown rules have become so confused that even the Prime Minister is giving out wrong advice.

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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.

"As the final official Brexit negotiations conclude, there is concern over several areas of the UK economy that could be dealt significant blows in their ability to do tariff-free business with the EU from January 1st.

The pharmaceutical industry believes that the Government has not done enough to secure its competitive position with Brussels while there is a perennial concern from the fishing industry that it could face competition from French trawlers within UK waters.

Although it is a relatively minor part of the overall economy, fishing rights have always been a symbol of UK independence with several skirmishes over the years. "

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.

"BoE Governor Andrew Bailey injected a sense of reality into the UK’s potential recovery as he branded it inconsistent but slowly improving.

Bailey also added his take on the conversation around negative rates commenting that the media had read too much into recent comments.

Bailey went on to say that he felt that the economy would be between 7% and10% weaker this quarter than it was at the end of Q1 when the Pandemic really hit.

Three days of intense Brexit negotiation between Westminster and Brussels began yesterday with the lingering rumour of a potential breakthrough still hovering over the talks.

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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 Office for Budget Responsibility, a Government funded body that provides economic forecasts has said that it expects unemployment to peak at between 10% and 13% in the next two years. The latest data shows the jobless rate to be at 4.1%. This not only bears out the Chancellor's comment that not every job can be saved but shows the scale of the economic fallout the country faces from Covid-19.

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.