EUR/GBP takes a tumble as Brexit thunder clouds form over Brussels

We’ve said it before, and we’ll say it again… this is a massive week for everyone’s favourite international drama. Nope, this has nothing to do with Peaky Blinders. We are, of course, talking about Brexit. Let’s take a look at what’s going on in the FX market before zooming in on other things happening this week. Yes, that’s right, there is more to life than Brexit.

What’s up with Brexit this week?

Oh, it’s a biggie. The EU Council will play host to a last-ditch meeting from Thursday onwards, the intention of which is to thrash out a deal before the UK crashes out of the EU on 31st October without one. Both sides are quite clear in their belief that they don’t want this to happen. So, something has to give. Surely?

How are the markets doing?

On Friday, EUR/GBP slumped from its one-month highs to hit its lowest point in a fortnight. To make matters worse for the EUR, a rally of GBP later in the day pushed the pair sharply lower.

This all happened following the meeting between UK PM, BoJo, and his Irish counterpart, Leo Varadkar, which resulted in the rather jolly statement that “a Brexit deal is possible”. That deal hasn’t been struck yet, and the road ahead isn’t entirely free of monumentally huge potholes, but this faint glimmer of hope certainly impacted the markets.

All eyes on Brussels on Thursday/Friday as the summit to end all summits commences. Will the UK pull a rabbit out of the hat and come away with a deal? Will there be an extension to the 31st October deadline? How long for? Will the UK Parliament revoke Article 50? Will there be another general election? Another referendum? Will Brexit happen at all? So many questions, ZERO answers from us at this point. Let’s hope we get something on Thursday.

The hottest events of the week

If you’re anything like us, you hate wasting time and FX trading research is definitely one that fits inside that oh-so-naughty category. You can spend hours researching and still be none the wiser as to which will be the best pairs to trade and when the volatility will spike. It’s a minefield. Enter Contentworks. We’ve done all the hard graft, so you don’t have to. Here are some of the events that have a high potential for volatility this coming week. No guarantees, of course, but you’ll probably want to keep an eye on these…

● Tuesday is a crazy-busy day all over the globe, kicking off with the release of the RBA meeting minutes (AUD). This is followed closely by the Chinese Consumer Price Index (CNY), and two tasty British announcements (GBP): The Average Earning Excluding Bonus and the ILO Unemployment Rate. Don’t put your feet up there, though… Following all of this is the German ZEW Economic Sentiment survey (EUR) and, finally, the New Zealand Consumer Price Index (NZD). And breathe…

● …but not for too long! Wednesday sees the release of the UK’s Consumer Price Index YoY for September (GBP), and also the US’ Retail Sales Control Group (USD).

● If you still have room for more, it keeps coming! The all-important European Union Council summit on Brexit (GBP, EUR) commences on Thursday and who knows what could come out of that. Whatever you’re doing, it’ll be almost impossible to miss this!

The Council Summit concludes on Friday, so get ready for some fireworks and some potential volatility on both days. Almost every imaginable outcome is still possible! Aside from Brexit, there are also some important GDP announcements from China on Friday, don’t miss those CNY traders.

What a week. Don’t forget to take proper breaks between trading. You won’t be at your sharpest and able to make good, quick decisions without being well-rested. You’ve been warned!

That’s it for this week’s trading preview. Did you enjoy it? We only ask because we love writing this kind of stuff. Actually, if we’re being honest, we’re a bit in love with writing all kinds of financial and trading-related content. If you’re looking to increase your content output and you think your traders might be interested in something along these lines, get in touch. Don’t be shy!

Speak soon.

The Contentworks team

Contentworks is a content marketing agency that's all about telling your story and achieving your goals. Unless you want to climb Everest.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store