Brexit is upon us or is it
30 September, 2019
As September comes to a close and we enter the month of October which brings us closer to the Brexit deadline at the end of the month on the 31st. Boris Johnson has been very adamant that the UK will be leaving the European Union with or without a deal. With the new law put in place that an extension must be requested should a deal no be reached it is unlikely that a no-deal scenario will play out? However, Boris may have another trick up his sleeve in finding a loophole in order for his task of leaving by the 31st to come to fruition.
Boris is due to meet EU leaders when he attends the EU summit in hope to secure a deal for an orderly divorce however it is unlikely a deal will be struck considering the stubborn approach from both sides especially in regards to the Irish backstop. So what does this mean for Sterling? Well as we have seen in the past few months that any uncertainty surrounding Brexit usually comes at a heavy price for Sterling. Market forecasters are predicting the pound to decline further on both the Euro and the Dollar from last weeks losses of over 1% from where this time last week. Should a no-deal Brexit go ahead and the UK leaves on the 31st we can expect to head towards the lows seen in August of 1.06 on the Euro.
Should you have a requirement for currency within the next 4 weeks it may be a good idea to consider purchasing your currency sooner rather than later with a forward contract to remove your exposure from the unpredictable movements in the currency market. Get in contact with your broker today to discuss your options.
Data this week
With Brexit mostly controlling the market’s movement there is still notable data to mention. Today the UK releases GDP figures at 9.30 am which is expected to remain at -0.2%. On Tuesday the EU post their CPI figures later at 1 pm Germany release Harmonized index of consumer prices. In the afternoon the US post-ISM Manufacturing PMI at 2 pm. On Thursday the US Post ISM Non-manufacturing at 2 pm and lastly on Friday the US release Average hourly earings and non-farm payrolls at 1.30 pm.
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- The Pound last week hit its lowest level against the Euro for over 10 years 23 March, 2020
- BoE Rate cut sees Pound claw back after Flash crash 20 March, 2020
- Last week compounded sterling weakness as we saw traders dump sterling daily 16 March, 2020
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