Mays announcement sees Pound strengthen
3 April, 2019
The pound is trading higher across the board this morning following Theresa Mays announcement that she is prepared to engage in cross-party talks to reach a consensus on a Brexit deal, in order to find a majority in the House of commons.
As a result, the Pound has gained strength, as it is more likely now that a Brexit deal will be agreed, and that should it be the deal will be one that will lead to a softer Brexit. May said I her speech last night that she would approach the EU for an extension in order to have these discussions and broker a cross party deal, but that this extension would be one as short as possible.
This move has been welcomed by the markets and has seen Sterling gain back much of the losses seen following the last failed attempt to pass any votes through parliament.
However whilst we see the Pound surge back, you may want to buckle up for a bumpy ride.
Despite Theresa Mays move to engage in cross party discussion, this does not necessarily mean that a deal will be made, particularly at this late hour. The basis of the talks will centre around her existing agreement – one that so far has gained no traction, and she also needs to appease both the DUP and her own Conservative hard-line Brexiteers. If May cannot make swift ground on brokering a deal, there could well be numerous resignations from within her party, and the potential withdrawal of her parliamentary support from the DUP which would see the Tory party lose their parliamentary majority. And with the issue of the Irish backstop still the elephant in the room, this could be the case and would mean it would only be a matter of time before a general election would have to be called.
The prospect of this alone would be very poor for the Pound , on the premise that in the current climate we would likely see a Corbyn led government.
With all this in mind, you might like to take advantage of rates where they are currently – as we have seen may times before in this Brexit climate, they can often drop quickly.
And with the Brexit rollercoaster still rolling on, despite Mays last ditch attempt, no-deal is still a possibility, so how long will it be before we see them dip again?
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