Sterling got, if not exactly what it wanted, then the second best thing on Wednesday.
One day before Boris Johnson’s self-imposed Brexit deadline, the UK government blinked, signalling that negotiations will continue beyond this Thursday.
For investors this removes an element of volatility going into what could be a very choppy period, with increased covid-19 restrictions and the looming US election.
It also enhances hopes that a deal can eventually be reached, allowing the pound to undergo a rather extreme swing as the session progressed.
Starting the session down 0.4% against the dollar and euro alike, sterling found itself up 0.9% against the greenback and 0.8% against its single currency rival in the aftermath of the deadline-delaying reports. That puts cable above $1.305, essentially recovering most, if not all, of Tuesday’s fretful losses. Against the euro, meanwhile, the pound was at a 5-week peak of €1.11.
Of course this was the last thing the FTSE wanted to deal with. The UK index underwent a similar transformation to its current cousin, swapping a 0.6% increase this morning for a 0.6% decline, staggering back below 5930 in the process.
Elsewhere the markets weren’t up to much. The DAX added 0.2%, while the Dow Jones was unchanged after the bell, positive election news and negative covid-19 updates sort of cancelling each other out.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."