Pound wobbles as Brexit talks resume today

The Pound fell from 1.133 against the Euro this morning to just under 1.13 as this blog went live. The drop was due in part to the cabinet reshuffle taking place yesterday with the MP for Witham Priti Patel resigning her post as International Development Secretary over unsanctioned government meetings while she was on holiday in Israel recently. The other side of the coin is the Brexit talks resume again today and so far that has had a harmful effect on the Pound as uncertainty continues about how and if a deal will be reached when the UK leaves the EU.

There has been little data of note since the interest rate rose last week so political sentiment is likely to have the biggest effect on the markets as the week comes to a close. However tomorrow sees manufacturing data from September released and consensus is a drop in activity is to be expected so expect a coinciding drop in the value of the Pound.

The situation in Saudi Arabia remains volatile as Crown Prince Mohammed Bin Salman consolidates his power after a string of high-profile arrests attributed to a crackdown on corruption. This coupled with growing tensions between Iran and Saudi Arabia over Iran’s alleged support of Houthis rebels in Yemen including the supply of a ballistic missile that was launched against the capital of Saudi Arabia Riyadh earlier this week continues to escalate quickly. The Markets will be watching events unfold closely in the coming days.

In other news President Trump issued a stark warning once again to North Korea to “not underestimate us” as he tours Asia this week. Rhetoric like this tends to cause movement for the US Dollar as the markets try to predict Trump’s next move, something that has proven difficult to do in the past.

As a whole I believe Brexit talks will now be the main focus as we head towards Christmas and I believe unless real progress can be achieved before then the Pound will continue to suffer.

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