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Despite continued setbacks in the Brexit negotiation process for U.K. PM Boris Johnson, Sterling was the currency to rule them all this week. This was likely due to comments from German Chancellor Merkel on the urgency of getting a deal done and off of U.S. dollar weakness sparked by a late week negative turn in the U.S.-China trade war story.

United Kingdom Headlines and Economic data
Monday:
- Rightmove HPI: The average price of U.K. property coming to market falls by 1.0%
- Food and petrol shortage, violence, hard Irish border-secret Brexit doc predicts disaster
- Jeremy Corbyn: General election will stop Brexit ‘crisis’
- Mark Carney on joined-up policy-making, forward guidance and Brexit
- BoE’s Carney says negative rates not an option for UK: Central Banking
Tuesday:
- Britain’s Boris Johnson Appeals To EU To Drop ‘Irish Backstop’ Demand
- Donald Tusk rejects Boris Johnson request to remove backstop
- U.K. manufacturing output stabilised in August, following a drop in July – CBI Industrial Trends Survey
- The British pound recovered from the earlier London session fall induced by the EU’s rejection of the Irish backstop removal request from British PM Boris Johnson. There doesn’t seem to be a direct catalyst, but it is possible that this move could have been off of U.S. dollar weakness.
Wednesday:
- Boris Johnson’s Brexit approach making no-deal ‘far more likely’, Ireland’s deputy PM warns
- Public sector net borrowing in July 2019 was in surplus by £1.3 billion, a £2.2 billion smaller surplus than in July 2018
- Dublin refuses to engage with UK on plan for no-deal Brexit
- Corbyn calls cross-party meeting to ‘do everything’ to stop no-deal Brexit
- German Finance Minister: Brexit deal will not be changed
- After Germany hints at compromise, France tells UK: no new Brexit deal
Thursday:
- UK recession fears rise as survey points to sharp fall in retail sales
- Sterling rises as Germany’s Merkel comments on possible Brexit solution
- UK’s Johnson in Paris: we will not set up border checks in Ireland
- Merkel: ’30 days’ Brexit remarks were meant to highlight urgency – Her comments at the joint new conference with Boris Johnson were taken as a positive sign that a Brexit deal would be coming very soon (she later explained that this wasn’t what she meant), sparking a strong pop higher in the British pound against the other major currencies.
Friday:
- Mark Carney: dollar is too dominant and could be replaced by digital currency
- Boris Johnson: New Brexit deal with EU won’t be a cinch
- Sterling took a step back from Thursdays gains during the Friday London session, likely on a combination of news that the EU’s position on Brexit remains unified (i.e., no renegotiation) and off of risk aversion sentiment rising as after reports of China retaliating with tariffs on $75 billion worth of US goods and resume auto duties. But the British pound was able to take back some of Thursday gains after Trump orders US companies to look for ‘alternative to China’ in tweet, fueling the trade war flames in the process. Risk aversion sentiment flooded the markets still but it also had a weakening effect on the U.S. dollar, which likely supported the pound into the weekend as the top gainer among the major currencies.