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Pound Weakness Continues

GBP has again experienced weakness against both EUR & USD after weekend reports that Brexit talks could break down as early as April.

One of the main factors is the arm-wrestle negotiations on British Fishing Waters and the access the EU want. Countries like Spain, France, Holland, Belgium & Ireland all currently have access to UK Fishing Waters.

Any amendment to this agreement could see European Fishing Boats able to catch significantly less fish. A draft negotiation mandate presented to EU Ambassadors over the weekend show these major EU states instructing Michel Barnier to keep existing fishing rights in place.

The Irish Election on Saturday looks to have seen Leo Varadkar dumped from position of Prime Minister. Most likely opportunity is for a Coalition-Formed Government. Opinion Polls in the last 24 hours suggest main opposition Fianna Fail (Republican Party) is winning the most seats and therefore in a strong position to form a multi-party coalition with Fine Gael (Liberal Conservative Party). Both these parties seemingly have consistent views of Leo Varadkar on the Irish Economy as well as Brexit.

Due to recession fears in Germany, and potential negative impacts globally from the Coronavirus outbreak in China, European Finance Ministers are due to agree plans to increase further tax cuts and increased government spending. This needs to be agreed by 17th February and is likely to face minimal opposition with German GDP for the last Quarter expected to have shrunk even further.

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