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. See our updated Privacy Policy here.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • #Bitcoin - Daily Chart - breakout to ATH . . Watch the close. . .
  • Now that the Bitcoin ATH is out of the way - BTC +2.1% @ $65,540 - can we concentrate on Ethereum #btc #bitcoin #eth #ethereum
  • Hit series ‘Squid Game’ expected to drive subscriber growth into year end. Get your market update from @RichardSnowFX here:
  • $EURUSD res has held at that 1664 spot but buyers stepped-in for some higher-low support, right around prior resistance. could have some continuation left here, next res zone 1700-1736 $EURUSD move will be key to #DXY dynamics
  • Mid-Week Market Update session with special guest @tastytrade's @tastytradeRyan starting now -- join here:
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: France 40: 0.12% US 500: 0.09% Wall Street: 0.02% Germany 30: -0.17% FTSE 100: -0.22% View the performance of all markets via
  • RT @carlquintanilla: B of A: “The virus situation is improving rapidly and this has helped spur a pick-up in activity. .. Air travel contin…
  • $USD still holding support in the 93.43-93.73 zone shorter-term, not yet able to pose any meaningful continuation moves, still lower-lows, highs next r level, 94.17 next s level, 93.52 #DXY
  • 🇨🇦 Core Inflation Rate YoY (SEP) Actual: 3.7% Previous: 3.5%
  • 🇨🇦 Inflation Rate MoM (SEP) Actual: 0.2% Expected: 0.1% Previous: 0.2%
Brexit Briefing: Sterling Trade-Weighted Index Drops to Nine-Month Low

Brexit Briefing: Sterling Trade-Weighted Index Drops to Nine-Month Low

Martin Essex, MSTA, Analyst

Talking Points

- The British Pound’s effective exchange rate index has fallen to its weakest point since November 2016 as the Brexit talks between the UK and the EU become increasingly acrimonious.

- While monetary policy will remain the key driver of the currency, a lack of progress in the negotiations could well undermine it.

Check out our Trading Guides: they’re free and have been updated, with several new ones now available including Forex for Beginners, Building Confidence and Traits of Successful Traders

An effective exchange rate index for the British Pound, calculated by the Bank of England, has dropped to its lowest level since early November last year – illustrating the overall weakness of the currency despite its appreciation against the US Dollar in the current year to date.

This has been due primarily to a growing perception that the BoE will leave its monetary policy settings unchanged while the economy is growing slowly at the same time as inflation remains above target. However, the latest comments from Brussels, where a third round of Brexit negotiations between the UK and the EU is taking place, are also undermining it.

Chart: Sterling Effective Exchange Rate Index, Daily Timeframe (Sep 1, 2016 – Aug 30, 2017)

Brexit Briefing: Sterling Trade-Weighted Index Drops to Nine-Month Low

Source: Bank of England via Thomson Reuters

In the past few days, Michel Barnier, the EU’s chief negotiator, has been forthright. “We must start negotiating seriously. We need UK papers that are clear. The sooner we remove the ambiguity, the sooner we’ll be in a position to discuss the future relationship… I am ready to intensify negotiations over the coming weeks,” he told reporters.

European Commission President Jean-Claude Juncker was equally undiplomatic. In a speech to EU ambassadors he said he had read all the papers produced by the British Government with the “requisite attention”. “None of those is satisfactory,” he said, “so there are an enormous amount of issues that need to be settled.”

Barnier’s comments were described by the British government as “ill-judged and unhelpful” while the Eurosceptic newspaper The Daily Telegraph was apoplectic. “Who do they think they are? The attitude of these two unelected apparatchiks displays all the unaccountable arrogance that has put so many people off the EU, and not just in Britain. Were the voters in some other countries given a referendum on continued membership, the chances are the result would be the same as it was here,” it roared.

While this position-taking by the two sides was inevitable, the ferocity of the early skirmishes has been surprising and could well bring a hard Brexit without an agreement between the two sides closer. In due course, that could weaken the Pound even further.


Index / Exchange Rate

Change (Exchange Hours/GMT Session Rollover)

Market Close/Last

FTSE 100















Upcoming UK/EU Event Risk


Date, Time (GMT)



German Retail Sales (MoM) (Jul)

Aug 31, 0600



German Retail Sales (YoY) (Jul)

Aug 31, 0600



Bank of England’s Michael Saunders Speaks in Cardiff

Aug 31, 0725



German Unemployment Change (Aug)

Aug 31, 0755



German Unemployment Rate s.a. (Aug)

Aug 31, 0755



Euro-Zone Unemployment Rate (Jul)

Aug 31, 0900



Euro-Zone CPI Estimate (YoY) (Aug)

Aug 31, 0900



Euro-Zone CPI – Core (YoY) (Aug A)

Aug 31, 0900



--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at

Follow Martin on Twitter @MartinSEssex

For help to trade profitably, check out the IG Client Sentiment data

And you can learn more by listening to our regular trading webinars; here’s a list of what’s coming up

Like to know about the Traits of Successful Traders? Just click here

Or New to Forex? That guide is here

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