The last couple of days have lived up to the hype everyone gave this week

16 October, 2019

Tom Arnold

The last couple of days have lived up to the hype everyone gave this week, as being one of the likely most volatile of the whole of the three year Brexit process. Having experienced last week’s negativity as any hope of a deal was largely quashed by Boris and Angela Merkel’s seemingly big impasse during the rumoured, but never officially confirmed, phone call, we then experienced a sign of things to come with a sudden spike in rates at the end of the week, when Boris and Leo Varadkar were suddenly coming out and talking a potential deal up. We then come to this week and the rumour mill has gone even further into overdrive when yesterday there was the talk of surprise press conferences and potential draft deal announcements. The pound soared, as a result, jumping up even further than Friday’s gains, hitting rates not seen since May of this year against the Euro.

However, the draft deal didn’t materialise, there were no surprise press conferences, and it seems, while positivity remains, there is still some way to go for a deal to be agreed, and critically the clock is ticking down. Michel Barnier had suggested yesterday that a deal needed to be in draft form by midnight last night for the EU to have any chance of getting this week’s summit prepared and hence any deal agreed. The DUP and some hardline Brexiteers have said an emphatic NO to any chance of an Irish sea border, which is purportedly the basis of any current deal. But negotiations continue despite this, with what is likely a very critical day in front of us – remember the summit is supposed to start tomorrow.

For those with an upcoming currency requirement, it really is critical to stay in touch with your CI currency consultant to find out exactly what breaking news is doing to the market and what your options are for securing your currency. Even if a deal is drafted today, there is a very long way to go, including ratification by the EU at the summit, and then by the UK parliament on Saturday, both of which could easily fail, and if no deal does materialise, then Saturday is also the day the Benn act kicks in and Boris is supposed to ask the EU for an extension – and there is still doubt whether he will even abide by this or whether he will push for No Deal. So all possibilities are still in play, with all of the very varied possible Sterling connotations, and we are already down a cent against the Euro from where we were yesterday evening.