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Traders unworried about Brexit uncertainty

28 Sep 2020

Traders are not very worried about the Brexit negotiations which are currently held at a standstill. Due to the familiarity with the situation, Sterling traders are not selling the UK currency, even as we grow closer to the Brexit deadline. 

Investors said, “Brexit fatigue is definitely there. Coronavirus has overwhelmed Brexit. Participation levels are still relatively light and it’s generally opportunistic.” Refinitiv data conveyed that there was a 25% increase in ash sterling weekly turnover during the third week of September. The Pound Sterling dropped by 5.8% this month to 1.27. 

Improved risk sentiment undermined the U.S. Dollar which extended its pull back on Friday. The USD is close to a two-month high at the start of the week. Having reached a new high at 94.745 last week, the dollar index now trades at 94.530.

On the other hand, the Euro was being traded at 1.16125.  Euro investors are awaiting ECB President Christine Lagarde's introductory statement which will boost the shared currency’s value.

ING said, “We think euro/dollar should find good long-term demand below the 1.1600 area, but really require some better news on the global recovery (effective lockdowns, vaccines, new stimulus) before the euro/dollar rally fully resumes.”

Moreover, the AUD/USD exchange rate is set to fall closer to the 0.6970 range, traders claimed.