GBP/USD and FTSE 100 at Mercy of Brexit Headlines


GBP price, FTSE 100, Brexit news and analysis:

  • GBP/USD continues to hover around the 1.32 level but traders need to be wary of volatility as headlines – positive or negative – emerge from the talks this week between the EU and the UK on their post-Brexit trade relationship.
  • The FTSE 100 could also be buffeted by Brexit headlines but, as one of the biggest losers from the coronavirus pandemic, it could also one of the biggest gainers from vaccine optimism.

GBP/USD to be whipsawed by Brexit headlines

Headlines from the talks between the EU and the UK on their post-Brexit relationship, which continue this week, will likely be the principal driver of GBP/USD and EUR/GBP short-term, with volatility likely as positive news boosts the Pound and negative news weakens it.

For now, GBP/USD is relatively stable around the 1.32 level but a dip to support around 1.31 from the lows reached late Thursday / early Friday would be no surprise, and nor would an advance to last Wednesday’s high just above 1.33.

GBP/USD Price Chart, One-Hour Timeframe (November 9-17, 2020)

Source: IG (You can click on it for a larger image)

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FTSE 100 to gain from coronavirus vaccine optimism

The FTSE 100 index of the major London-listed stocks is also likely to respond to the headlines that emerge from the trade talks but the bigger picture here is the hope that a coronavirus vaccine will bring about a recovery from the economic slump caused by the pandemic.

The FTSE 100 has been one of the hardest hit of the major stock market indexes because so many of its components are “value” stocks, such as travel companies and banks, that have been battered down by the impact of the virus. Now, a rotation into value stocks from “momentum” stocks like Netflix and Amazon that have benefited from the pandemic means the index has scope to recover strongly.

FTSE 100 Price Chart, One-Hour Timeframe (November 9-17, 2020)

Latest FTSE 100 price chart.

Source: IG (You can click on it for a larger image)

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— Written by Martin Essex, Analyst

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