25 October, 2019
It has been a busy week or so for the Pound, and one that has seen it rise to 6 months highs against both the Euro and USD, following market excitement that the speculation of a deal being done was true.
In a small way, it was but only so far that a deal was done between Boris and the EU. Getting the pro-remain MPS, the Irish, and indeed the UK parliament is, of course, another matter. Once this reality sunk-in rates began to slowly slip back down, with the greenback having stolen just over a cent and a half, and the single currency just over a cent from the highs seen earlier in the week. Given the ongoing and increasing political uncertainty, we are seeing once again, expect GBP rates to struggle. Last night Boris said that he would offer a vote on a general election on December the 12th, but reports suggest opposition parties will reject this. If an election was approved it would allow Boris to bring back the withdrawal bill, giving until November the 6th for judgment, but this is set to be rejected. So once again we see the clock running down, with no firm idea of how things will play out.
Certainly, exchange rates seem poised for an extension given their recent rise, however, this is finely balanced, as reports suggest French President Macron is once again reluctant to grant the EU’s stay of delay.
With viable options seemingly narrowing, many are suggesting that the upper hand may now be slipping to Corbyn, who will look to delay a general election until at least a Hard Brexit is off the table.
And so, may find themselves with a strange sense of Déjà vu. A bill in principle agreed, which some but not enough want.
The Irish are unhappy and the article 50 clock is ticking down, with no real suggestion we are anywhere near getting a deal agreed. All while political uncertainty and in-fighting dominate UK parliament, and the French threaten to veto an extension.
With the circus playing on, uncertainty is the current driving force in GBP market rates, so expect them to struggle in the short term.
With this considered you may like to speak to your Broker today and take the opportunity of the currently high rates, which look set to drop in the coming days.
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