A look back at 2020 from the treasury team

Brian Middlemiss, treasury executive, takes a look back at a most unusual year in the foreign exchange markets given Brexit, the US elections, and a nasty bug.
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Published 29 December
3 mins

The end of the year is an opportunity to look back over this as on of the strangest of years – certainly the most unusual in the 36 years that I have worked in the foreign exchange markets.

2020 – What was all that about?

A year ago, we were looking forward to life with a new Conservative leader in the UK, an end to Brexit finally on the horizon, electioneering in the US only beginning to pick up as the presidential election year dawned, and just a whispering of a nasty little bug that was originating in China. And here we are, a year later… Brexit still not resolved and looking as though it could now slip into 2021. We have a new president-elect in the US (eventually) and as for that nasty little bug… boom!

The effects of the coronavirus on the world economy cannot be overstated. Global interest rates have been severely affected and, in most cases, are now either close to zero or, in fact, at negative levels. Exchange rates have peaked and troughed more times than Kingda Ka (the world’s tallest rollercoaster). To prove the point, you just need to look at GBP/USD which began the year at the 1.3250 level. As COVID-19 began to move west, the Pound eased to 1.3131, in early March, before plummeting nearly 15% to 1.1485 in just 10 days. The Euro suffered a similar fate, albeit a more modest drop of around 6.5%, as EUR/USD moved from 1.1447 to 1.0690 in the same period. There is no doubt that Sterling had been weakened by the effects of coronavirus, on top of the government’s efforts to deliver Brexit, but what was very clear was the flight to safety for investors, with the US Dollar being the safe haven.

From the low points, both the GBP and EUR have made significant gains against the USD. In fact, as hopes of a Brexit resolution have been raised, dashed and raised again, both currency pairings are likely to go into the festive period at stronger levels than they were a year earlier. GBP/USD at 1.3350 and EUR/USD at 1.2200 at the time of writing.

In my 36 years of working in the markets, I have seen many historic events create havoc in just about every type of investment – whether it’s a shock change of administration, a birth of a new major currency, a handful of gulf wars, 9/11, just about every day of the week preceded by the word ‘black’, a banking crisis or an unforeseen referendum result. All of these events have left a mark and were extremely volatile at the time, but the one thing that they have in common is that the period of turmoil remained relatively short. 2020 has broken that mould. I doubt that there has been a more sustained period of volatility and uncertainty in global markets since the Second World War, and until we see a Brexit deal agreed and COVID-19 finally defeated, there is a reasonable chance that 2021 will start, at least, in the same vein.

From everyone at Nedbank Private Wealth International, I would like to extend this  season’s greetings to you all, and wish you a peaceful and safe New Year.

about the author

Brian Middlemiss

Brian Middlemiss

Brian is responsible for managing the foreign exchange book across the company’s international jurisdictions. As part of the treasury team, he works closely with our relationship managers to provide foreign exchange solutions for our clients.
Brian joined in December 2018 and has over 35 years’ financial markets experience, working for various global banking operations including Lloyds Bank Plc, Royal Bank of Canada and BNP Paribas.


Brian is a member of the Chartered Institute for Securities & Investment and holds the Investment Management Certificate and ACI Dealing Certificate.

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