ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for December 20, 2019. This is not a trading advice. See details below:
Despite some gains during early Friday trading, the Pound is on course for the worst week in 2 years, having lost almost 2.5% to the US Dollar.
Sterling weakness reflects the end of the post-election optimism; many investors believed a comfortable conservative majority would drive a flexible stance from the new government, in its negotiations with the EU.
However, the firmness of Boris Johnson’s unwillingness to extend the transition period signals the opposite, meaning that, come December 31st 2020, we may potentially have an abrupt UK exit from the European Union. So, even though the political uncertainty about Brexit is gone (definitely happening), economic uncertainty over its final shape persists, which is bad news for Sterling.
Ricardo Evangelista – Senior Analyst, ActivTrades