The pound sterling (GBP) recorded its best monthly performance in three years in October with an increase of 2.4% m-o-m against the USD, mainly driven by market optimism towards finalising the Brexit deal. The GBP jumped by 5% between 9th and 16th October, as a direct result of the announcement of the agreement between the UK and the EU. However, the market optimism was quickly subdued by the rejection of parliament on the 22nd to complete the process in three days, leading to a new extension until the 31st January 2020.
This latest rally in the GBP is an indication of the volatility in the next few months until a new deal is agreed. In the case of a final agreement between the EU and UK, the pound sterling will likely appreciate quickly as the currency reached some record lows since the beginning of the referendum. Any appreciation of the GBP would, however, narrow the UK’s current competitive advantage on the global commodities market, through lower export prices.
From foreign exchange, political elections and purchasing indicators, all the macroeconomic factors impacting the food and non-food markets have been analysed to provide a market insight for this month. Mintec’s Macroeconomic Insights deliver information on factors shaping the market dynamics of various commodities, providing the opportunity for market participants to stay ahead of factors that will impact procurement decisions.