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The Pound stopped growing. Overview for 27.05.2020

27 may 2020 - Fx4News

GBPUSD is correcting on Wednesday after making some upward movements the day before; the Pound is “totally at sea”. 

The British Pound is correcting against the USD in the middle of the week. The current quote for the instrument is 1.2294.

This week, there aren’t too many numbers from the United Kingdom, that’s why the Pound is either following the global trend or monitoring the Brexit situation. The CBI Realized Sales report published yesterday showed -50 points in May after being -55 points the month before and against the expected reading of 065 points. The report is formed based on the Confederation of British Industry’s findings and probably provides a quite objective picture. 

As long as there is no important news, the Pound enthusiasts are getting back to the Brexit issue. Nowadays, when Germany and France are discussing a new fund worth €500-600 billion to help European countries that suffered from the coronavirus pandemic the most, one can see the overall picture in the European Union without the United Kingdom. 

London is currently believed to be the key element in the EU’s defense and military industry. After the United Kingdom leaves the alliance, it’s Germany and France who will “run” for the position of a military general in the European Union. One should be reminded here that the Euro Area’s security is controlled by NATO after all and London has already guaranteed the observance of all relevant regulations. However, it doesn’t solve, for example, the defense sector trading problem – it’s rather unclear who and how will regulate it. In this case, Germany, with its attitude to optimize and systematize everything, may step up. Risks of possible complications are not numerous but, still, there are some, and they make any negotiations in this area face the absence of the overall trade agreement. 

For the Pound, it’s a long-term and “blurry” risk, which, nevertheless, should be kept in sight.

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