We have a deal or do we?
18 October, 2019
What a difference a week can make as we have seen a significant shift in the currency market with Sterling making considerable gains against the major’s thanks to all things Brexit. Boris Johnson against all odd’s has managed to strike a deal with the EU for the UK’s departure from the European Union. Throughout the week there had been positive leaks in the press that a deal was close and a deal being ironed out and as a result has seen Sterling gain nearly 5 cents on the Euro since last week. Then yesterday news broke that a deal, in fact, has been agreed with the EU. Boris’s negotiating team has miraculously managed to come to an agreement on the seemingly impassable Irish backstop, Michel Barnier said: “Throughout these negotiations, the EU and UK were fully committed to protecting peace and stability on the island of Ireland.”
This all sounds hunky-dory, doesn’t it? Well, you would be wrong at this point to think that Brexit is finally coming to it’s end. The next pivotal stage will be this Saturday when the parliament meet in the house of commons to discuss the deal and to make the crucial vote for passing the deal.
Boris Johnson will need the majority vote from MP’s in the house of commons so that Brexit can finally come to fruition, enter the DUP. The Democratic Unionist Party who had previously helped the conservatives form a majority government in the last general election is set to put a pin in BoJo’s Brexit bubble. The terms agreed between the UK and the EU have not gone down well and Arlene Foster and has categorically said she will not be backing the proposed deal, oh come on Arlene. The DUP along with Labour the Lib Dem’s and the SNP who are reportedly going to vote against will more than likely bring us back to square one. Could a no-deal once again be on the cards? An Extension? No Brexit at all? 2nd referendum? General Election? Any of these scenarios could play out and The Pound will certainly be the one to suffer. Gains seen over the last week could be eradicated within seconds and we may be facing the abyss of sub 1.10’s once again.
As previously mentioned with Sterling soaring nearly 5 cents on the Euro it has presented very attractive buying rates from where Sterling was last week. To put that in monetary terms a property costing €100k is roughly €5000 cheaper. Make no mistake that Saturday’s vote If not passed will impact Sterling negatively and the saving on a property could very well turn into more of an expenditure.
What are your options?
In the past 24 hours we have seen an influx of Stop-loss orders and forward contract buying. A stop-loss order allow you to set a safety net rate so that if the market was to drop your currency is bought at what you have budgeted for and still being able to takes advantage of gains form this week. If you are not gambling then this option may work well for you.
- Debate between Jeremy Corbyn and Boris Johnson 20 November, 2019
- Little in way of key developments for Sterling exchange rates 18 November, 2019
- What are you waiting for? 15 November, 2019
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