Rates hold whilst PM seeks new amendments
7 February, 2019
European Council President, Donald Tusk, spoke yesterday morning with a statement stressing again that the EU’s position is clear and will not be making any new offer on the withdrawal agreement. Continuing to make quite the comment saying, “I have been wondering what a special place in hell looks like for people who promoted Brexit without any plan for how to do it”, he continued to say that the main priority of the EU’s 27 main is to maintain peace regarding the Northern Irish border. With no encouragement what so ever that the EU will budge on the withdrawal agreement could mean the PM is fighting a losing battle and a no deal Brexit could well be a genuine prospect.
In the eyes of currency, this is to be the worst case scenario, and its likely Sterling will lose any ground it has made over the turn of the year should there be a no deal Brexit. Theresa May is due to meet European President Jean-Claude Juncker today at 10 am to negotiate amendments. Can the PM come back from her trip to Brussels with some positive modifications that pass through Parliament on the 13th? If she is successful, we could see a more amicable exit from the EU meaning Sterling could benefit. However, at this point, things are still very up in the air, and we can expect current levels to continue or decline further in the coming days and weeks until the divorce date – 29th March.
With no major releases out this morning, the focus will be on the May-Junker meeting, later at lunch, the Bank of England release their latest interest rate decision which is expected to remain at 0.75%, along with accompanying press statement. Shortly after at 12:30 BoE Governor Mark Carney speaks and investors will be looking out for any indications regarding economic forecasts.
As ever, if you have sterling in hand and looking to make a transfer, then do get in touch with one of our currency consultants and talk through the various options we provide to help you lock in your rate, and help you keep track of market movements to mitigate your risk.