The Pound has just moved off its recent lows following the publication of a letter from the UK Brexit secretary (Raab) which implies he expects a deal by 21st November.
The letter was sent to the Brexit Select Committee and Dominic Raab wrote: “I would be happy to give evidence to the Committee when a deal is finalized, and currently expect 21 November to be suitable”.
The Pound has continued to struggle over the past couple of weeks and sterling bulls are clinging onto any signs of good news. They’ve seen this letter as a signal to buy the pound but it’s likely this move could be very short-lived as he’s not explicitly saying he thinks the deal will be done by then. Also the date of the 21st was a date given to him by the select committee to appear before them which is likely why he’s referring to it and finally the letter is dated 24th Oct.
So overall, all he’s really saying is he plans to appear before them on that date if a deal is done but will cancel if a deal isn’t made!
Regardless, following this release, the GBP/USD moved up close to 1-cent but still trades around 10-week lows. The GBP/EUR touched 1-cent higher and traded up to a 1-week high. Brexit is likely to continue to be the dominant driver of the Pound and as the deadline approaches we expect increased volatility. November could be quite an interesting month for Sterling, so watch this space….