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Sep 26 - 11:55 PM

GBP/USD - COMMENT-Sterling Approaches A Tough Winter As Brexit Bites

By Andrew M Spencer  —  Sep 26 - 10:00 PM

Supply chain issues, a global concern until economies fully reopen, are even more of a problem for the UK and potentially sterling as the impact of Brexit bites.

Britain's retail, hospitality and transport sectors are all struggling to find qualified staff following the exodus of European workers post-BrexitnL8N2QQ0VA.
The government plans to issue short-term visas to lure some of the workers back, but industry experts think it may be too little, too late nL8N2QR0FF.
This opens
the door to a very tough winter for many and potentially also for the economy and the pound.

The UK government continues to put 'sovereignty' above the economy, as its refusal to implement its Brexit deal with the European Union generates problems in Northern Ireland nS8N2OU01E.

With the UK replacing France in a major Australian submarine contract nL8N2QQ1YA, the EU's trust in the UK government is likely to be at a very low ebb. As the EU is the UK's biggest customer, this has negative implications for the economy and could weigh on sterling.

The GBP/USD technical setup is also negative, with 5, 10 and 21-day moving averages falling, while 21-day Bollinger bands expand.
The bias is lower while the 1.3764 21 DMA caps, looking for a test of the July base at 1.3572.

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gbp 2 Sep 27 Click here

Source:
Refinitiv IFR Research/Market Commentary

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