4th November 2020 - Increased volatility for Sterling Read more
Increased volatility for Sterling
Sterling has seen increased volatility overnight in line with other risk sensitive currencies as details from the US Election have emerged.
The Pound traded as high as 1.3140 against the Dollar and towards .8950p against the Euro before losing ground as it became clear that the contest for Presidency will be much closer than polling suggested. On the domestic front Brexit negotiators are moving closer to a potential compromise over fishing quotas, according to sources, which could pave the way to a deal in the coming weeks. Further boosting optimism is the fact that both sides are playing down the significance of the passing of the Oct 31st deadline for the UK to respond to the EU’s decision to start legal action over the Internal Markets Bill.
29th October 2020 - Brexit UK Developments - Corporate Update – October 2020 Read more
Brexit UK Developments - Corporate Update – October 2020
As the path of Brexit enters its crucial final phase, this update outlines the latest UK developments in relation to ongoing Brexit negotiations, currency markets, UK interest rates and also analysis on Benchmark Reform including key dates. Read more
23rd October 2020 - Brexit Update- FX and Sectors Read more
Brexit Update- FX and Sectors
In this second edition of our Brexit Update- FX and Sectors series, we look at key areas affected such as the international currency market and the Agriculture, Food & Drink, and Manufacturing sectors. Read the latest update from Lee Evans - Head of FX Strategy, Roisin O'Shea - Head of Food & Drink, Eoin Lowry - Head of Agriculture, and Brian Evans - Head of Manufacturing. Read more.
13th October 2020 - Sector Developments & Insights Read more
Sector Developments & Insights
Welcome to the first instalment of Bank of Ireland’s monthly Sectors update. Our monthly update will outline the latest developments, head-winds and opportunities across ten pivotal sectors; Agriculture, Food & Drink, Hotels, Pubs/Restaurants, Pharmacy, Long-term care, Manufacturing, Motor, Retail and Technology. Read more.
6th October 2020 - Bank of Ireland Head of Agriculture Eoin Lowry fears that Irish beef will be uncompetitive in Britain in the event of a no-deal Brexit Read more
Bank of Ireland Head of Agriculture Eoin Lowry fears that Irish beef will be uncompetitive in Britain in the event of a no-deal Brexit
Brexit poses a serious threat to Irish agriculture, says Bank of Ireland head of agriculture Eoin Lowry, but he doesn’t foresee job losses or any fall in output Read more
24th September 2020 - Read our FX and Sector Team Brexit Update- September 2020 Read more
FX and Sector Team Brexit Update- September 2020
As the path of Brexit enters its final phase, we look at key areas affected such as the international currency market and sectors such as Agriculture, Food & Drink, and Manufacturing. Read the latest update from Lee Evans - Head of FX Strategy, Roisin O'Shea - Head of Food & Drink, Eoin Lowry - Head of Agriculture, and Brian Evans - Head of Manufacturing.
10th September 2020 - Euro/Sterling back above 90p and 1.5% higher in recent days as Brexit tensions escalate Read more
Euro/Sterling back above 90p and 1.5% higher in recent days as Brexit tensions escalate
Euro/Sterling is back above 90p and 1.5% higher in recent days as Brexit tensions escalate heading into the latest round of talks. EU Chief Negotiator Barnier last week declared that the UK have not shown any inclination to compromise on certain issues despite the EU demonstrating flexibility during talks. Over the weekend, reports suggest that the UK is now planning new domestic legislation that will override key aspects of the Withdrawal Agreement established last year.
The Internal Market Bill, which is expected to be published on Wednesday, will seek to ensure smooth trade across the UK and avoid tariffs between Northern Ireland and the mainland while also covering certain aspects of state aid. This in turn could potentially set UK law in direct opposition to the obligations of the Withdrawal Agreement. Meanwhile Boris Johnson could set a deadline of October 15th to get a deal agreed while the UK Prime Minister is expected to tell EU counterparts that the UK is willing to walk away rather than compromise on what the UK government view as the core principles of Brexit.
There is one round of negotiations left after this week’s talks with both Mr. Barnier and UK PM Johnson highlighting the need for a deal by October at the latest. While Irish businesses continue to face COVID-related challenges, souring sentiment in Brexit negotiations will be another cause for concern. While tariffs on goods are still not a certainty, volatility on currency markets is likely to persist as the path for Brexit enters its crucial final phase.
7th September 2020 - Deadline of 15th October set for the UK and EU to reach a trade deal Read more
Deadline of 15th October set for the UK and EU to reach a trade deal
The Pound is under pressure at the start of the week after weekend news that PM Johnson has set a deadline of 15th October for the UK and EU to reach a trade deal. He also commented that leaving the EU without a trade deal would still be a “good outcome” while the FT reports that the UK government is planning new legislation this week to override key parts of the Northern Ireland Protocol. EURGBP is currently trading at .8950p with the next round of formal trade talks due to start tomorrow.
21st August 2020 - The Pound performing strongly despite no clear breakthrough in the latest round of Brexit negotiations Read more
The Pound performing strongly despite no clear breakthrough in
the latest round of Brexit negotiations
The Pound is far and away the best performing major currency this week despite no clear breakthrough in the latest round of Brexit negotiations. Euro/Sterling is testing the bottom of the recent range below 90p and the lows at 0.8940 from last month. This morning saw the release of the latest UK Retail Sales figures which showed a further pickup in line with other data this week; while later on UK Manufacturing, Services and Composite PMI numbers are due.
13th August 2020 - Read our Brexit Analysis feature by Lee Evans in Business Plus magazine Read more
Brexit Analysis feature by Lee Evans in Business Plus magazine
4th August 2020 - Sterling continues to trade on a firm footing particularly against the Dollar and GBP Read more
Sterling continues to trade on a firm footing particularly against the Dollar and GBP
Sterling continues to trade on a firm footing particularly against the Dollar and GBP. USD has now managed to recoup all of its losses since March at current levels of 1.3100. Similar to other currencies, the beginning of the new month has seen more volatile price action with cable dipping to 1.3000 yesterday before regaining lost ground. There is little in the way of economic data today but things pick up tomorrow with Services PMI due while the main event this week will be the Bank of England interest rate meeting on Thursday. No change is expected to the official rate but investors will be watching closely for any indication of negative rate action in the future.
23rd July 2020 - Customer Checklist Bank Guarantee for Revenue Read more
Customer Checklist Bank Guarantee for Revenue
23rd July 2020 - Brexit Update Proposed Tariff Changes Read more
Brexit Update Proposed Tariff Changes
17th July 2020 - Euro/Sterling is trading just below 91p Read more
Euro/Sterling is trading just below 91p
Euro/Sterling is trading just below 91p as the Pound underperforms into the end of the week. Reports in the UK suggest that the government could increase taxes while there will also be a large increase in the amount of UK borrowing to fund the COVID recovery. Overnight Bank of England MPC Member Tenreyro confirmed that negative rates remain a ‘live issue’ for the bank while today will see BoE Governor Andrew Bailey speak with markets watching closely for any signs of future policy changes.
3rd July 2020 - Register for one of our Brexit Webinars launching July 9th Read more
Register for one of our Brexit Webinars launching July 9th
For more information and to register please click here
3rd July 2020 - Sterling holds on to recent gains Read more
Sterling holds on to recent gains
Sterling has managed to hold on to the gains seen over the past few sessions as global risk sentiment has improved and investors look forward to the further reopening of the economy which reaches another milestone this weekend. The UK will lift quarantine requirements for multiple European countries from 10 Jul with a full list due to be published today although the economic recovery will be slow as illustrated by a recent survey showing 75% of UK manufacturers are preparing to cut jobs within the next 6 months.
29th June 2020 - Summer months key to path of Brexit Read more
Summer months key to path of Brexit
As Irish businesses adapt to the easing of Covid-19 restrictions, clarity over the path of Brexit could further help reboot the Irish economy. In recent weeks the focus for currency markets in relation to Brexit has centred on two questions; firstly are we seeing progress on the key issues and secondly, will the UK formally request an extension to the transition period? We have an answer to the second question as the UK moved their official position on an extension from “we won’t request” one to “we won’t accept an extension even if the EU offers it”. This led to the EU formally acknowledging that the UK won’t be seeking to prolong the transition period beyond the end of December. But is there any progress being made on the key sticking points in Brexit negotiations?
Based on the commentary following the last round of negotiations, the answer to that appears to be no. The Chief UK Negotiator David Frost indicated that “we very much need a change in EU approach” following the fourth round of talks while from the EU side, Michel Barnier was even more blunt, saying “the UK did not engage in a real discussion” on some of the key issues. However despite this, there has been signals of positive progress recently following a video conference call between Boris Johnson & Ursula von der Leyen of the EU Commission; the UK Prime Minister said “new momentum was required” and the plan now is to intensify talks in July in an effort to come to an agreement on the key issues.
While there are still a number of key issues to be resolved, a big focus remains on the ‘Level Playing Field’. The EU maintains its position that regulatory protection is needed for EU firms to prevent UK firms from gaining a competitive advantage, particularly given how close the UK is to the EU market and the high levels of trade. For their part, the UK argues that it should not have to agree to these rules since it is only seeking a limited trade agreement similar to the one the EU signed with Canada, which did not include such strict commitments. A resolution to this deadlock could see both sides agree that the regulatory alignment for the UK must not regress – and rules remain at least as they are at the moment – with opportunities for both sides to negotiate more trade deals in the future.
As with all negotiations, there’ll likely need to be compromise from both sides but there are economic and political incentives to make progress on this issue. Last year in the UK the Conservatives pledged that 80% of UK trade would be covered by free trade deals within three years which would not be possible without a deal with the EU. Other areas including governance, fisheries and financial services equivalence will all still need to be worked out but a resolution to the ‘Level Playing Field’ question would be a major step forward in negotiations. From an EU perspective, the steadfast rhetoric of “nothing is agreed until everything is agreed” may need to change to allow further progress in the weeks and months ahead.
‘Will Covid-19 impact the Brexit process?’ This has been a regular question from Irish customers in recent weeks, and there are essentially two schools of thought on the issue. Firstly, the idea that with so many challenges for economies across the globe, the extra damage from a No Deal Brexit should be avoided and therefore a deal should be agreed. Boris Johnson and the UK Government would be able to say that given the exceptional circumstances, giving some concessions or extending a period for implementation purposes is justifiable while similarly the EU could justify a softening of their stance on certain issues.
The second argument is that a No Deal scenario actually pales in comparison to the impact of Covid-19 which therefore makes it an easier path to take. Over a 10-15yr period No Deal was estimated to knock about 10% off UK GDP, slightly less for Ireland, and this view would be that these figures seem quite minor compared with some of the recent numbers related to the pandemic. But Brexit goes beyond just the economic forecasts and a No Deal scenario would have a direct impact on Irish businesses.
Despite no extension being agreed before the end of June deadline, the plans to inject fresh momentum into talks – with intensified negotiations set to restart in July – are a positive development. There is motivation for both sides to iron out a deal in the months ahead to allow time for businesses to adapt and for any required legislation to be passed. While the chances of resolving all the outstanding issues related to Brexit before the end of the year seem unlikely, progress on the ‘Level Playing Field’ would be a significant step forward. With lockdown rules here beginning to ease for the summer months, the Brexit process is likely to accelerate. As the clouds begin to part, clarity on the path of Brexit could emerge by the end of the summer. ×
5th June 2020 - Final round of Brexit talks due to conclude today Read more
Final round of Brexit talks due to conclude today
The final round of scheduled Brexit talks is due to conclude today with seemingly little hope of a breakthrough in trade negotiations nor an extension ahead of the July 1 deadline for the UK to request an extension of the transition period due to expire December 31. The first press conference is scheduled to begin around midday while a further high level meeting is scheduled for later in the month but the lack of progress continues to weigh on the Pound with EURGBP trading back towards 90p.
2nd June 2020 - The Pound trading well as reports suggest UK would be willing to negotiate on some areas regarding Brexit Read more
The Pound trading well as reports suggest UK would be willing to negotiate on some areas regarding Brexit
While COVID-19 continues to dominate the news cycles in the UK, Brexit is slowly coming back to the forefront as this month is likely to be an important marker in the process. The Pound has traded well at the beginning of the week as reports in the UK suggested that the UK would be willingly to negotiate on areas such as fisheries and the Level Playing Field however until clear forward progress has been made, markets are likely to remain on a nervous footing.
20th May 2020 - Brexit back in focus Read more
Brexit back in focus
Brexit is back in focus as Chief EU Negotiator Michel Barnier was on the receiving end of some stark criticism from his UK counterpart, David Frost, who accused the EU block of offering an unfair, relatively low quality trade agreement. Elsewhere this morning’s CPI and PPI numbers in the UK showed a slight dip against the expectations, YoY CPI fell from 1.5% last month to just 0.8%. Euro/Sterling remains at the upper end of its recent range, above 89p, as markets focus on the crucial period for Brexit talks in the coming weeks.
1st May 2020 - Sterling trades at its best levels against the Euro since the beginning of March Read more
Sterling trades at its best levels against the Euro since the beginning of March
Today, Sterling traded to its best levels against the Euro, below 87p, since the beginning of March while the Pound also retested the April highs above 1.26 against the Dollar. While April is historically a strong month for Sterling, May traditionally suggests an underperformance. Earlier this morning data showed that UK Nationwide Houses Prices actually picked up in April however the main data comes at 9:30am with the Manufacturing PMI’s.
17th April 2020 - Sterling still holding its recent gains as the market refocuses on the resumption of Brexit negotiations Read more
Sterling still holding its recent gains as the market refocuses on the resumption of Brexit negotiations
With Covid-19 cases now topping 100 thousand in the UK, the government, as expected, has extended its lockdown measures for at least another three weeks. Sterling is still holding its recent gains as the market refocuses on the resumption of Brexit negotiations with the FT reporting that the UK will not accept any EU offer to extend the Brexit transition period beyond year-end 2020 – a partial toughening of stance as previously the government stated it “would not ask for any extension.”
9th April 2020 - EUR GBP slips back below the 88p threshold Read more
EUR GBP slips back below the 88p threshold
Sterling is marginally firmer this morning after UK data was slightly ahead of expectations, with GBPUSD opening up just above the 1.2350 mark. At the same time, EURGBP has slipped back below the 88p threshold where it finds major support at the 0.8750 level. Elsewhere Chancellor Sunak indicated that PM Johnson’s condition is improving in ICU as UK leaders are set to announce an extension to current restrictions as we move into the Easter break.
19th March 2020 - Sterling plunges against the Dollar and ten year lows recorded against the Euro Read more
Sterling plunges against the Dollar and ten year lows recorded against the Euro
Extreme volatility in UK markets saw Sterling plunge to 1.1500 against the Dollar, a level last seen in the early 1980s. Ten year lows were also recorded against the Euro at 95p as market participants scrambled to cut their long Pound positions.
With the UK authorities deemed to be lagging their European counterparts in taking drastic action to stem the spread of the Virus some commentators are suggesting the impact of Coronavirus may be more severe and expectations are for a further 25 bp cut and increased QE from the BOE.
12th March 2020 - Euro/Sterling trading above 88p Read more
Euro/Sterling trading above 88p
The fallout from yesterday’s surprise Bank of England cut and the UK budget sees Sterling trade back below 1.29 against the Dollar while Euro/Sterling is trading above 88p. BoE members suggested that more support would be provided if necessary.
New UK Chancellor Rishi Sunak announced measures to specifically combat the virus alongside long-term spending in infrastructure and other areas; the total amount is expected to be more than £30bn.
27th February 2020 - Brexit negotiations come back into focus Read more
Brexit negotiations come back into focus
Sterling fell against the Euro yesterday as the single currency made gains across the board. Euro/Sterling is trading above 0.8450 as Brexit negotiations begin to come back into focus. The EU released their negotiation mandate which continues to focus on a Level Playing Field while today sees UK PM Johnson release the UK’s Brexit Strategy ahead of negotiations which are due to begin next week.
20th January 2020 - Sterling on back foot as UK Chancellor Sajid Javid vows EU rules divergence Read more
Sterling on back foot as UK Chancellor Sajid Javid vows EU rules divergence
Sterling opened the week on the back foot following comments from the UK Chancellor on its future trading relationship with Europe. Speaking last week, Sajid Javid told the Financial Times that after Brexit “there will not be alignment, we will not be a ruletaker, we
will not be in the single market and we will not be in the customs union - and we will do this by the end of the year."
Last week the Pound held in well despite Interest Rate markets now pricing a 75% chance of a cut by the Bank of England. While the data has been weak, markets will be focused on this week’s Employment numbers, and crucially the PMI number due on Friday ahead of the BoE next week.
6th January 2020 - The Pound under pressure in recent weeks Read more
The Pound under pressure in recent weeks
Sterling continues to trade at the lower end of recent ranges as markets return expecting Brexit at the end of this month. The Pound has been under pressure in recent weeks as UK PM Johnson has so far held firm that there will be no extension to the transition period, while the weaker risk backdrop in recent days has also weighed on the currency. Services PMI is due today with Bank of England Governor Carney speaking on Thursday as he approaches the end of his tenure.