Britain may violate the "Brexit" clause, Gold prices fell slightly

In Daily Market Review, English
September 16, 2020

Britain may violate the “Brexit” clause
According to sources quoted by “Reuters,” the European Union may postpone its decision on whether to allow London to continue to settle euro transactions until the end of this month because the United Kingdom may violate some provisions of the “Brexit” agreement. Earlier, the European Union stated that even if the United Kingdom “Brexit” next year, it will allow the London Clearing House to continue to serve EU customers for a limited time. The details were originally scheduled to be announced this week. Currently, more than 90% of Euro-denominated swap transactions are processed at the London Clearing House. If a large number of transactions are transferred to other institutions in a short period of time, it may cause market turbulence. Both the EU and the UK have exerted extreme pressure on each other during the limited negotiation period, which has significantly increased the uncertainty in the relevant negotiations.

Gold prices fell slightly
Gold prices fell slightly on Tuesday, falling back from their two-week highs touched earlier in the session as the US dollar rose, but hopes that the Fed will adopt a dovish monetary policy stance limited the decline in safe-haven gold. The top priority in the day is the Fed’s decision. The market will pay attention to the Fed’s revised economic forecast and relevant information about inflation targets and asset purchases. It is worth mentioning that the Fed will make expectations for the economy in 2023 at this meeting, which represents the Fed’s long-term prospects and will therefore have a direct impact on gold and the US dollar.

 

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