Hard Brexit Fears as Clash over Fishing Rights

GBP

Whilst the UK attempts to recover from the disruptions caused by Storm Ciara over the weekend, GBP hit a new 2 month low against the US Dollar amid renewed concerns over the weekend suggesting that trade negotiations could collapse “within months” due to EU demands for fishing rights and unaltered access to UK’s fishing waters.

Sajid Javid is also expected to increase infrastructure spending in Northern England in his March budget statement which is causing further volatility in the Pound.

UK’s GDP figure is the main one to look out for this week as forecasts predict a drop from last quarter to 0%, which could see Sterling fall further. The Governor of the Bank of England, Mark Carney, will be speaking at Parliament regarding how Monetary policy can improve the UK economy.

EUR

Whilst the UK & EU battle it out over fishing rights, Head of the ECB, Christine Lagarde is expected to speak during the week based on the Economic Growth Forecasts which will give further indication on current EU health.

This could map out how we expect both the EU & consequently the Euro to strengthen over the next one year.

USD

Friday afternoon saw a late push on the Dollar as Non-Farms data came out much better than expected. USD strength carried on into Monday morning, with USD/GBP hitting a fresh 2 month high and USD/EUR hitting a new 4 month high.

US has a relatively busy week ahead as both inflation and retail sales data are to be released towards the back end of the week which could see the Dollar strength reversed should results come out as expected. Federal Reserve chair, Jay Powell will be delivering his semi-annual testimony to Congress, on which he is expected to provide an update on the US economy and outlook including the impact of Coronavirus and how this could hinder any plans.