GBP outperforms peers ahead of Brexit negotiations

Cate Camerota

September 28, 2020

GBP outperforms peers ahead of Brexit negotiations

Sterling strengthened as much as 1.4% ahead of another round of Brexit negotiations this week which investors are speculating will result in a positive outcome. Markets moved towards risk-on trading and the USD is trading lower despite quarter-end flows. EUR/USD continues to trade within the low 1.1600's and technical indicators signal this is the most oversold the currency has been since February.

9/29 Tuesday: German CPI

9/30 Wednesday: US GDP Annualized; UK GDP

10/1 Thursday: US Initial Jobless Claims

10/2 Friday: US Change in Nonfarm Payrolls

FX Rates
September 28, 2020

Rates are not real time. Rates are today's indicative mid-market rates as of time of publishing, which may vary. Please contact SVB for a current quote.

EUR/USD 1.1670
GBP/USD 1.2868
USD/CAD 1.3378
AUD/USD 0.7066
USD/JPY 105.4800
USD/CNH 6.8220
USD/ILS 3.4618
USD/MXN 22.2424
USD/CHF 0.9272
USD/INR 73.7888
USD
The dollar index dropped as the market moved towards risk-on assets. This move was partially offset by the start of quarter-end flows supporting the US dollar. The Bloomberg index slipped 0.2% this morning.
GBP
The British pound surged the most in six months ahead of this week’s Brexit trade negotiations. Investors are speculating that this week’s talks could result in a breakthrough and shield the UK from a chaotic divorce from the EU. Sterling rose as much as 1.4% outperforming the G10 currencies.
EUR
Technical indicators signal that EUR/USD is the most oversold since February hitting a low of 1.1615. The intraday support for the currency pair is at the Sept 25 low of 1.1612.
CAD
The loonie remains largely unchanged holding above the 1.3350 level. The Canadian dollar remains dependent on the broad USD tone and market risk sentiment.
ASIA/PACIFIC
Since March, the Japanese yen has made several attempts to strengthen beyond the 104 level without any success. Last week asset managers boosted long yen positions to a record high based on data going back to 2006. Traders remain focused on uncertainties around the US presidential election, Brexit and additional coronavirus infections resulting in an upswing in purchasing the Japanese yen.

For more analysis on FX markets or information regarding SVB's FX services:

Contact your respective SVB FX Advisor or the SVB FX Advisory Team at fxadvisors@svb.com.
See all of SVB's latest FX information and commentary at www.svb.com/trends-insights/foreign-exchange-advisory

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Source: Bloomberg

This article is intended for U.S. audiences only.

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WRITTEN BY

Cate Camerota

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