The pound ended the day “higher” than the euro yesterday after a more positive day of post-Brexit talks that could see the stalemate between the UK and the EU broken. Mr Johnson and EU Commission President Ursula von Der Leyen also agreed yesterday that there will not be an extension to the UK’s Brexit transition period. This means the UK should officially leave the EU on December 31 2020.
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However, the UK and EU must agree a post-Brexit trade agreement in this time, otherwise the UK will leave with no deal in place.
The post-Brexit talks have had a dramatic impact on the exchange rate in recent weeks.
The pound is currently trading at a rate of 1.1173 according to Bloomberg at the time of writing.
This is above yesterday’s trading rate which was 1.1093, with the pound just clawing back over that 1.11 handle.
Michael Brown, currency expert at Caxton FX spoke to Express.co.uk to share his exclusive insight on the current exchange rate.
He said: “Sterling ended the day a touch higher against the common currency on Monday, with the pound being boosted by some – rare – positive news on post-Brexit trade talks, with the PM noting that there is a ‘very good chance’ of a deal being done.
“Today, after this morning’s labour market data is released, the pound will likely continue to take its direction from the trend in risk appetite, which has markedly firmed overnight.”
However, Brexit isn’t the main topic on everyone’s minds.
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Some investors and experts are becoming more concerned that a second wave of coronavirus could be on the horizon after another serious outbreak in Beijing.
Joshua Mahony, Senior Market Analyst at IG, discussed how second wave fears and stock market hurdles are on investors’ minds.
He said: “A new breakout in Beijing coronavirus cases has raised further questions over the potential for a second wave.
“Meanwhile, easyJet is taking to the air once more, but major hurdles remain if they are to achieve a successful summer.
“Markets are on the back foot once more today, with sharp declines in risk assets taking a nosedive once more on the prospect of an impending second coronavirus wave.
“A small-scale outbreak in Beijing has highlighted the difficulties that will be found worldwide when attempting to resume economic activity while minimising the spread of the virus.
“However, the Chinese decision to implement strict shutdown procedures in response to this small outbreak highlights the stark differences between the Chinese and American approach.
“With the US seeing 25,000 new cases on Saturday alone, Trump’s hard stance on the possibility of another US lockdown could spell trouble for US markets given the potential for an overwhelming outbreak down the line.”
Mr Mahony then said that easyJet’s return to flying yesterday is encouraging for the tourism sector.
He added: “Yesterday saw the first easyJet flight since they stopped operations on 30 March, with many European nations hoping that this will mark the beginning of an important period of tourism after missing out on months of visitors.
“Despite ongoing quarantine measures in the UK, the likes of easyJet and Ryanair expect to see a substantial rise in travel over the course of July after June provides a soft-launch of services.
“However, there is no doubt that we will see travel stifled as long as the quarantine measures remain in place, with investors hoping to see the government change tact amid a push to reverse the policy.
“The declines seen in European airline stocks this morning serves to highlight the fear that a second coronavirus wave could scupper summer entirely, causing another bout of detrimental cancellations and refunds throughout the travel industry.”
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