Pound Recovers From Recent Losses

The GBP has recovered recent losses against the Euro and US Dollar with the key focus todays cabinet reshuffle. PM Boris Johnson will have capabilities to refresh his team ahead of trade talks with the EU. This could have a high impact on the Pound as this coming year, all eyes are on the trade talks.

Johnson considers the cabinet to deliver key decision throughout the trade negotiation and the cabinet may influence the ultimate stance the UK adopts which is expected to maintain a tough and potentially uncompromising stance in negotiations.

Negotiations on the future relationship between the UK and the EU are due to start in the first week of March, but we would only expect real developments that will give a good insight into the direction of travel to emerge towards the end of the year.

Eurozone Industrial Production came out worse than expected at -2.1% confirming the factory sector has continued to shrink in the backend of 2019. French and Italian economies have also contracted in the final quarter of 2019. On the back of this the EU could potentially be forced to cut is already negative deposit rates below zero in the months ahead.

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