Today is in many respects crunch day for Theresa May with markets gearing themselves up for some final clarity on Brexit. After lots of dithering and a lack of clarity from Government, Theresa May has promised to deliver some final news and appears most likely to be forcing through some version of a ‘softer’ Brexit.
With the ‘harder’ Brexit MP’s in parliament and particularly the Tory party having controlled Mrs May for so long, it appears she will finally have to bow to one side or the other in delivering a position on Brexit which will ultimately provide direction over some difficult questions.
GBPEUR has been a little lower this week as the Euro finds some favour, and the Pound remains under pressure over the uncertainty this Brexit proposition creates, today and the weekend might present some opportunities for well-prepared clients.
Brexit is the biggest driver of Sterling exchange rates and we could well see the news move GBP. If Mrs May has managed to deliver her ‘third way’ with her hard Brexit colleagues like Boris Johnson onside, we could see the Pound strengthen. Should there be noises that senior cabinet ministers like David Davis and Boris Johnson will resign, this would destabilise the Government and see the Pound weaken. GBPEUR could be trading between 1.11 and 1.15 depending on how well the market receives the news.
It seems that whatever the final outcome from the weekend is, there are still likely to be many unanswered questions which could see the Pound languishing. It seems the concerns, question marks and alarm that Brexit has brought to the financial markets are not going to go away anytime soon. Today’s meeting will provide some further insight but could end up leaving us with even more questions than before; the pressure on Sterling seems likely to remain, and clients with any Sterling positions might wish to trade very carefully. To be kept up to date with developments and discuss strategy to maximise exchange rates, please contact me directly. You can email me using firstname.lastname@example.org.