News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bullish
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
More View more
Real Time News
  • 🇳🇱 Consumer Confidence (OCT) Actual: -30.0 Previous: -28.0 https://www.dailyfx.com/economic-calendar#2020-10-22
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.60%, while traders in EUR/USD are at opposite extremes with 74.60%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/fLkteBRqGu
  • The $SPX seems to have worked itself into an inevitable technical break, but follow through is unlikely given the election anticipation. Nevertheless, the Tesla aftermath on Thursday's open will be something to watch . My trading video for today: https://www.dailyfx.com/forex/video/daily_news_report/2020/10/22/SP-500-Due-a-Technical-Break-Dollar-Slides-on-Stimulus-Delay-Pound-Rallies.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/XPwZSCZqju
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/s0tvG7QXwJ
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.12% 🇳🇿NZD: -0.12% 🇪🇺EUR: -0.14% 🇨🇭CHF: -0.16% 🇨🇦CAD: -0.20% 🇦🇺AUD: -0.42% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/n7Phs46BX1
  • Heads Up:🇳🇱 Consumer Confidence (OCT) due at 04:30 GMT (15min) Previous: -28.0 https://www.dailyfx.com/economic-calendar#2020-10-22
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: FTSE 100: -0.46% Wall Street: -0.58% US 500: -0.58% Germany 30: -0.60% France 40: -0.82% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/xog2DUbSzY
  • British Pound Price Outlook: GBP/USD, GBP/JPY, EUR/GBP Key Levels - $GBPUSD poised to push higher after breaching key resistance. - $GBPJPY rebound struggling to break above the August low. - $EURGBP coiling up above key support https://www.dailyfx.com/forex/technical/home/analysis/gbp-usd/2020/10/22/British-Pound-Price-Outlook-GBPUSD-GBPJPY-EURGBP-Key-Levels.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $GBP https://t.co/Qr9Tl7Qse9
  • The US Dollar is once again losing ground against #ASEAN FX as $USDGD and $USDIDR may be readying to extend losses. Will $USDMYR and $USDPHP follow? - https://www.dailyfx.com/forex/technical/article/special_report/2020/10/22/US-Dollar-Technical-Forecast-USDSGD-USDIDR-USDPHP-USDMYR.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/olomq6jsAD
  • 🇹🇭 Balance of Trade (SEP) Actual: $2.230B Expected: $3.55B Previous: $4.35B https://www.dailyfx.com/economic-calendar#2020-10-22
Brexit Briefing: Event Risk to Keep EUR/GBP Under Pressure

Brexit Briefing: Event Risk to Keep EUR/GBP Under Pressure

2017-02-17 13:29:00
Martin Essex, MSTA, Analyst
Share:

Talking Points

- The triggering of Article 50 to begin the UK/EU divorce process is probably still six weeks away.

- Over that period and beyond, attention will likely focus on the Euro side of the EUR/GBP cross, and with so much event risk ahead, that could mean weakness.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

What could possibly go wrong for the Euro? Actually, rather a lot; particularly on the political front.

For a start, there’s Greece. There is currently almost no chance that Greece’s latest bailout will be agreed by the Eurogroup of ministers this coming Monday. Negotiations between the Greek government and its official-sector creditors have stalled due to a refusal by the Greek government to agree to further austerity measures, and so far the International Monetary Fund and the European Commission have been unable to agree on how to tackle the Greek crisis.

Germany, in particular, is determined that the IMF takes part, which it currently seems reluctant to do. “We are hearing about the good progress in the talks… with Greece,” a German Finance Ministry spokeswoman said Friday. “We have a convergence. But we are not so far technically that on Monday a final decision on the conclusion of the review can take place,” she added.

Concern about the lack of progress in the talks has raised the yield on 10-year Greek government bonds to 7.81% currently from the recent low of 6.43% in early December.

Then there’s the European Central Bank. The minutes of its meeting on February 17, released Thursday, suggested it’s unlikely to reduce its current monetary-stimulus program any time soon, in stark contrast to the US, where policymakers seem determined to tighten policy in the coming months. That’s a definite negative for the Euro, even though EURUSD has just broken out of a downward channel on the chart that had previously contained it throughout February.

Chart: EURUSD 1-Hour Timeframe (February 2017)

Brexit Briefing: Event Risk to Keep EUR/GBP Under Pressure

Source: IG

An ECB determined to keep monetary policy loose is likely to lead to Euro weakness not just against the US Dollar but against other currencies too.

The Euro also looks likely to suffer from the upcoming elections in the Netherlands, France, Germany and possibly Italy. In the Netherlands, the frontrunner is Geert Wilders, the right-wing candidate, and if he wins as expected that would usher in a long period of coalition talks. In France, the right-wing Marine Le Pen has a chance of victory as both her main rivals’ campaigns are spluttering. And in Germany it’s not impossible that Chancellor Angela Merkel could be defeated.

As with EURUSD, EURGBP has broken higher but with all these elections on the horizon it seems unlikely to strengthen much further.

Chart: EURGBP 1-Day Timeframe (October 2016 – February 2017)

Brexit Briefing: Event Risk to Keep EUR/GBP Under Pressure

Source: IG

The rising tensions within the Euro-Zone have led to a widening of yield spreads between 10-year sovereign bonds in Germany and those in Euro-Zone member states such as France and Italy that are perceived to be less robust financially. Add in talk of a downgrade to France’s credit rating and a breakup of the EU if Le Pen wins the election there, and Brexit could prove to be just a distraction in the weeks and months ahead.

Markets

Index / Exchange Rate

Change (Exchange Hours/GMT Session Rollover)

Market Close/Last

FTSE 100

+0.26%

7,297

DAX

-0.30%

11,722

GBP/USD

-0.50%

1.2421

EUR/USD

+0.25%

1.0647

EUR/GBP

+0.28%

0.8567

Upcoming UK/EU Event Risk

Events

Date, Time (GMT)

Forecast

Previous

UK Rightmove House Prices (MoM) (Feb)

Feb 20, 0001

0.40%

UK Rightmove House Prices (YoY) (Feb)

Feb 20, 0001

3.20%

German Producer Prices (MoM) Jan

Feb 20, 0700

0.40%

German Producer Prices (YoY) Jan

Feb 20, 0700

1.00%

UK CBI Trends Total Orders (Feb)

Feb 20, 1100

5

UK CBI Trends Selling Prices (Feb)

Feb 20, 1100

28

Euro-Zone Consumer Confidence (Feb A)

Feb 20, 1500

-4.9

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Don't trade FX but want to learn more? Read the DailyFX Trading Guides.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES