09/03/2020

Sterling edges higher against US dollar


GBP

Sterling moved higher against a weaker USD on Friday, and was further uplifted by comments from EU Chief Negotiator Michel Barnier that a trade deal could be achieved this year. GBP gradually edged higher throughout Friday, posting its best week against USD since December 2019.

GBP had been buoyed by comments from incoming Bank of England Governor Andrew Bailey that the Bank of England are still trying to gauge the impact the coronavirus would have on the UK economy, thus reducing fears of an immediate emergency interest rate cut.

However, the message from the Bank of England was that they would coordinate with the treasury to ensure any initiatives are complimentary. This could potentially open the door for an announcement next week which coincides with Rishi Sunak’s budget announcement.

In addition to this, the UK and EU concluded their first round of trade talks. Despite EU Chief Negotiator Michel Barnier acknowledging ‘very, very difficult differences’, Barnier admitted that a deal was still possible.

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