The Pound suffers further following deferred Brexit Vote

Yesterday did not fail markets expectations we saw the Pound take a further hit, losing ground across the board after the government announced the crucial Brexit vote had been deferred following an emergency cabinet meeting held in the morning. The rates immediately dropped as the markets digested the news.

In the afternoon the Prime Minister addressed MP’s in the commons where she said the reason for the delay in the vote was because it was evident the vote to proceed on the current deal offered would not have gone through. She then focused her attention to the deal on the table. Again she defended the current offer saying that she is in “absolutely no doubt that this deal is the right one”. Her statement seemed to focus on the resistance regarding the backstop agreement and said that she will be spending the next few days going back to EU leaders to discuss next options and gain further assurances regarding the backstop arrangement. https://www.bbc.co.uk/news/uk-politics-46509288

Both political and public opinions are running high, and news channels have been interviewing MP after MP to gain some insights, with the current government and negotiations being described as incompetent and a shambles, does not bode well for currency. The Pound continued to lose ground closing the day over a cent lower against its Majors.

The question over the next few days now will be, can Theresa May re-negotiate the backstop? After 18 months of negotiations and previously saying again and again that the deal on the table was the best deal we are going to get many could argue that no new agreement can be reached. Her credibility is being tested and the markets will watch carefully as talks mature.

In terms of ecostats, the UK posted negative results in the morning for both Manufacturing and Industrial production, not a great result and showing a slowdown which carried on into the GDP figure for October which came is as anticipated at 0.1%. the results seems to have little effect on the market as Brexit remains the main driver.  Today we have little to note, with UK Average earnings being the only ecostats out to note, due at 09:30.

With rates expected to remain in limbo and at the will of a Brexit vote, and with current levels fast approaching the lowest we have seen year to date, stay in touch with us here at Currency Index and speak to one of our team about how we can assist you with your upcoming currency transfers.