Sterling enjoyed another fine day on Friday as it posted its fifth consecutive day of gains against the dollar to climb firmly above the $1.31 mark. After Theresa May’s Brexit plans were roundly rejected by Parliament, it looked as if the pound might weaken, but there has been so much resistance to the idea of a no-deal Brexit – particularly Labour’s support for Yvette Cooper’s bill that is designed to prevent no deal – that sterling is enjoying something of a renaissance at present.
We thought we would bring your attention to some analysis from the Financial Times, which makes the point that banks have nudged their forecasts for the pound up in recent days as fears of a no-deal Brexit recede. This explains the recent sterling gains, but there is still so much that needs to overcome and achieved before anybody can firmly rule out a no-deal Brexit.
The Business Minister, Richard Harrington, praised Airbus for branding the government’s handling of Brexit a ‘disgrace’ and said a no-deal Brexit would be ‘a total disaster for the economy’. He conceded that Theresa May might well decide he is not the right person for the job, but he was dismayed that the Prime Minister appears to have done nothing to avert the possibility of exiting the EU without a deal.
Trump’s longtime political advisor, Roger Stone, was arrested on seven charges in Mueller inquiry, while the German Ifo business climate was just the latest reading for the eurozone’s largest economy to disappoint. There are several releases from the euro area this week, so it could be another difficult week.
Sterling’s performance could be dictated by what happens at tomorrow’s Parliamentary vote on the Brexit deal, although any amendments are not legally binding. Still, were any to pass, May would be under intense pressure to support them.
Until we have any certainty – and even then, as markets won’t stop moving – we highly recommend you lock in your exchange rate with a forward contract. Call your personal trader on 020 7898 0541 today to find out more.
