The Brexit deadline has been extended until October 31st after EU leaders managed to come to a compromise on the length of an extension. Donald Tusk had previously mentioned a one year extension, Germany was willing to offer until at least December and France wanted a short extension up to a maximum of two months. Eventually the leaders agreed that Halloween is the absolute final deadline for the UK to split from the EU with Donald Tusk having some very good advice to Parliament, “please do not waste this time”.
The pound showed no reaction to this announcement as it essentially gives no clarity on what is going to happen regarding Brexit. It seems this is just kicking the can down the road and we are still in limbo as to exactly when and how the UK will part ways with the EU.
The US Dollar has struggled to gain any momentum against a basket of currencies this week and yesterdays FOMC Meeting Minutes did little to improve the fortunes of the greenback. The minutes from the last meeting stuck to the recent dovish stance from the Fed with no change to interest rates expected this year.
The third of our most commonly traded currencies, the euro, is also lacking any positive trends at present. The European Central Bank (ECB) left their stance on monetary policy unchanged yesterday but Mario Draghi stated that economic data is weak and the ECB will be keeping a close eye on the effect of negative deposit rates on the banks.