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  • Writer's pictureMike Paterson

Pound in a Brexit whirl with deal imminent

Thursday 24 December 2020

Yes folks, it appears we might finally have some Brexit deal details this morning. Latest timings suggest 10.00 GMT but it could really come any time and we've seen another rally in the Pound after yesterday's rise and fall.

As always the devil will be in the detail and I do feel this will not be the last we hear of Brexit or indeed further negotiations/review but it should be some sort of line in the sand at least albeit with plenty of scrutiny of the estimated 2000 pages of the final document which needs to be ratified by parliament both sides of the English Channel.

Early forecasts suggest a moderate USD sell signal for month/year end flows but ironically the signal to buy GBP is the weakest of the G10 currencies given the strong performance of the FTSE.

GBPUSD has had another rollercoaster ride but held pivotal support at 1.3460 on yesterday's final retreat as per my tweet before breaking back up through 1.3550 to test 1.3600 as I type on the Brexit deal hopes. Good two way business again.EURGBP found a cap round 0.9080 and now back down through 0.8980 as I type. ( GBPEUR up to 1.1135) as the merry go round continues. GBPJPY found support at 138.80 then the pivotal 139.50-60 before surging to test 140.80 on the latest GBP rally.

Patience continues to be a virtue and rally-selling in GBPUSD still bringing its reward but entry level key as always. Definitely will continue to see some dip demand as the negatives get factored in so equally we're seeing a case for going long in the dips too but not my preference. Brexit fallout will still very much be in the mix whatever happens today and COVID will continue to cast its shadow.

USDJPY has held 103.30 again and now rallying back up through 103.65 while EURJPY still has 126.60 providing a decent cap amid variable USD/risk plays but equally 126.00 still providing support. EURUSD capped at 1.2220 this time around as some USD demand returned after holding 1.2150 again and now tightly bound around 1.2200 with large option expiries in play again.

USDCHF capped above 0.8900 again but now held around 0.8870 on the retreat amid mixed USD tones and EURCHF underpinned still with the SNB ever watchful and EURUSD ranging.

AUDUSD has found a base at 0.7550 this time around and now testing 0.7600 again while

USDCAD capped above 1.2880 and now testing 1.2830 again on softer USD tones/firmer oil combo.

I wish you a peaceful and enjoyable festive season and look forward to being of ongoing assistance in 2021. Next update planned for Wed 30th Dec.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 08.27 GMT

GBPUSD 1.3578

EURUSD 1.2206

EURGBP 0.8993

GBPEUR 1.1120

GBPAUD 1.7875

GBPCAD 1.7439

GBPJPY 140.63

GBPZAR 19.9045

GBPHKD 10.5441

USDJPY 103.60

USDZAR 14.6250

EURJPY 126.45

EURCHF 1.0832

EURHKD 9.4821

AUDUSD 0.7595

USDCAD 1.2847

USDCHF 0.8874

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