The pound moved higher against the US dollar on Monday. The increase comes amid growing expectations that the EU and UK will agree to a trade deal. If this happens, it will bring good sentiment in the market.
Goldman Sachs estimates that the two sides are "likely" to reach an agreement by early November of this year. Meanwhile, GBP/USD was also rumored to rise by 0.34% to $1.2974. Hopes for a deal on a post-Brexit trade deal continue to exist.
The situation was prompted by a report by the EU's chief negotiator Michel Barnier aiming to hold talks with European coastal countries. The aim is to get more freedom to negotiate terms with the UK on fisheries. It is one of the important points.
Various Statements Appear
As it is known that some points such as for example about fisheries are an important point that impedes progress. The sense of urgency comes just days after Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed on something.
They agreed to step up Brexit talks to close a "significant loophole" that hampered the progress of the talks. The joint statement created bullish conditions from Goldman Sachs and urged clients to buy sterling. The joint statement issued on Saturday is a clear political signal.
That has been achieved to further intensify technical talks. The bank, however, is not entirely taking the prospect of Brexit without a deal. This comes as it says the perceived possibility of no deal will last after the next European Council meeting in October.
Meanwhile, the Oil Price is Rising
Still on Brexit, if a deal doesn't happen later, the UK will leave the EU without a deal. This time is when the transition period ends on December 31. Of course, this condition is not expected by many because it can trigger problems later.
Elsewhere, oil commodity prices reportedly rose for several reasons. Oil prices rose on Tuesday due to supply disruptions in Norway, a new storm in the Gulf of Mexico, and the return of U.S. President Donald Trump to the White House from a hospital.
Oil Price Rise Data
Brent crude futures LCOc1 were up $1.02, or 2.5%. It was at 1220 GMT at $42.31 per barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading $1.02 higher, or 2.6%, at $40.24 a barrel.
Oil workers strike in Norway would certainly reduce the country's total production capacity by more than 330,000 barrels. This means the equivalent of oil production per day or about 8% of total production. This is what the Norwegian Oil and Gas Association says.
About 60% of the total cuts occur in natural gas, with crude oil and natural gas liquids filling the rest. Reuters calculated it from some data. In addition to Norway, there could also be a production outage in the Gulf of Mexico this week, where other storms have developed.
Energy companies also evacuated offshore oil bridges as Hurricane Delta strengthened to category 2. These natural conditions could even become major hurricanes when it reaches the Gulf of Mexico on Thursday. Therefore, the right strategy is needed for further action.
Trump's Health Condition and Its Effects
A rally in world stock markets after Trump returned to the White House from the hospital and expectations of a new U.S. stimulus package deal also pushed oil prices up. Earlier, oil prices had fallen sharply when Trump went to the hospital on Friday.
This is because it creates uncertainty for investors over what will happen in the United States. At the time, the country was preparing for presidential elections on November 3. On the other hand, expectations about U.S. stimulus also have an effect.
Hopes for a bipartisan U.S. economic aid package grew when House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke on Monday. They are set to speak again on Tuesday, in a concerted effort to reach a compromise on the legislation.
