On a day when economic data for the UK was more encouraging than it has been for some time, it was comments made by Michel Barnier that affected the currency markets. Following reports that the EU’s chief negotiator thought that agreeing a Brexit deal within the next six to eight weeks is realistic, the pound strengthened against the euro and dollar.
Towards the middle of yesterday afternoon, we also learned that EU leaders are on the verge of announcing that a Brexit summit will take place in November. There is speculation that leaders will instruct Barnier to work with the best of the Chequers proposals. It is looking more and more likely that almost everyone wants to secure a deal before the deadline.
Today, we have the all-important ZEW economic sentiment indices from Germany and the eurozone. Concerns over the impact of a trade war have diminished expectations in recent times and in Germany, the figure is forecast to fall further to -14.0 from -13.7. We will also see the employment change figures from the eurozone in the second quarter of 2018.
