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Sterling falls as the UK gets ready for a no-deal Brexit


11.12.2020
Sterling falls as the UK gets ready for a no-deal Brexit

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar         1.2700-1.2800

Euro                 1.5450-1.5550

Sterling            1.6750-1.6850

 

The US Dollar index is stronger this morning but that is only because of a big drop in Sterling overnight. In the UK, Prime Minister Johnson stated that the UK should get ready for a no-deal Brexit even as last minute negotiations continue in Brussels and also get ready for quite possibly the strongest levels of further lockdowns that the country has seen so far during the pandemic. GBP.USD fell from an overnight high of 1.3320 to trade as I write at 1.3150 and GBP.CAD fell from 1.6940 to trade at 1.6785 as I write. Again, there will be further losses on Sunday if a deal is not reached and if a deal should be reached you will see large gains for the Pound.

 

In the US it is the same story, the virus is raging throughout the country and Congress cannot agree on a stimulus plan as it looks like recent optimism is again waning for a deal by the end of the year. On positive stimulus news the EU has reached agreement on their 2.2 Trillion Euro plan after Hungary and Poland were brought onside, Euro jumped higher on the news so overall the EU may be in better shape than the UK.

 

The Canadian Dollar continues to perform well as USD.CAD opens the day at the 1.2770 (0.7830) level but it is off its lowest level of the overnight session. There is no reason to think that the Loonie cannot continue to move forward but with stocks pointing lower to start the day we may see USD.CAD move back a little higher today.

 



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