DailyFX Week Ahead Video: Brexit Talks and Possible Catalan Contagion
- Politics and Brexit will continue to dominate trade in the Pound in the week ahead.
- For the Euro, developments in Catalonia need to be watched closely.
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The Pound has been losing ground steadily against the US Dollar and GBP/USD weakness is likely to continue into the new week. Politics will continue to dominate the news headlines, with a possible leadership challenge to Prime Minister Theresa May on the cards and another round of Brexit talks looming, so another leg lower for the Pound is distinctly possible.
Politics is also beginning to dominate Euro trading as there seems to be an impasse in the Catalan quest for independence. So far there has been little sign of contagion, but if this changes and there’s any suggestion of support for the Catalonian cause from other parts of the EU things may change for the Euro.
As for the Dollar, a strong employment picture in the US has made another US interest rate increase even more likely. In the week ahead, the release of the minutes of the last FOMC meeting, at which the US left rates on hold, could affect expectations while consumer price inflation figures on Friday also need to be watched closely.
--- Written by Martin Essex, Analyst and Editor
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