Heading into the weekend, buying US Dollar, Euro and the Australian Dollar exchange rates received a boost. This appears to be a reaction of Article 50 being triggered. Let’s not forget to mention that the European response probably affected the rates, too.
People who follow this site probably know that when Article 50 was triggered last Wednesday didn’t really overwhelm the currency markets. A good example of this is the Pound to Euro exchange rates. Those rates were pretty slow throughout the day, which one may not have expected because there has been talks about triggering Article 50 for months.
On Friday, it looked like the markets were waiting to see how the Eurozone would react. Everyone was interested in seeing how the Eurozone would respond and how they would negotiate with the UK. One concern was whether or not the Eurozone would let us discuss trade relations concurrently with negotiations in regards to leaving the European Union.
Germany head of state made some pretty hostile comments, and so did France’s head of state. They made comments the night before Article 50 was triggered. The statement that the EU made did make it look like there was a bit of wiggle room for trade negotiations to begin before England has officially left the EU. That right there revived optimism for the Sterling Pound.
All eyes are not really on the UK, at least at the moment. However, there is talks of another Scottish Referendum. If those talks continue to gain traction, then the UK can be expected to be back in the spotlight.
Also, Trump is edging three months in office and there is the French elections going on. Both of those are impacting commodity prices in Australia, and things there may start to pick up. This should end the slow periods experienced during the buildup to the triggering of Article 50, which is when investors were really on edge.
In the near future, economic data will be made public and this will likely reveal a lot more market sensitivity to the news that made its rounds at the end of 2016 and in the first three months of 2017. This is when you’ll notice trends becoming established fast. What this means for investors is they will need to move rapidly to get their hands on any potential opportunities, whether they are short or long-term ones. For now, investors will have to wait a few more days for the economic data to be released.