Home » Currency Note » Currency Note » MPs set to discuss Brexit withdrawal proposals

Good morning to you all. We trust you had a decent festive break? Many of you no doubt returned to work last week, but some of you will be back in the office today for the first time this year. You are not the only ones, as MPs return from their Christmas break today to begin discussing the Brexit withdrawal proposals. On Friday afternoon, Theresa May spoke to the European Commission President, Jean-Claude Juncker, to seek written assurances that the unpopular Northern Ireland border backstop will not be used.

There will be some who say the Prime Minister’s actions are futile, as it is widely expected that the bill will be defeated when the Commons votes on it next week. As it stands, it is believed that between 30 and 40 Tory MPs will definitely vote against May’s deal, while Sammy Wilson, the Democratic Unionist party’s Brexit spokesman, said his party opposed the backstop. Last week we also learned that more than half of Conservative party members would prefer MPs to reject May’s deal and leave the EU with no deal.

Non-farm payrolls in the US smashed forecasts in December, increasing by 312,000 against an expectation of 177,000. The figures suggest that the US economy is still performing extremely strongly and may well lead to some thinking the Federal Reserve should keep hiking interest rates this year. This flies in the face of market predictions that there won’t be any hikes in 2019. The news boosted stock markets around the world, with the FTSE 100 pushing up by more than 2% in afternoon trading, while the German Dax was up by 2.7%. Fed Chair Jerome Powell’s comments caused the Dow Jones Industrial Average to rally too – further information is detailed below.

British house price growth slowed to its weakest pace since 2013, with prices falling by 0.7%. However, the UK services PMI came in at 51.7 in December from 50.4 the previous month, bettering the 50.7 analysts had been expecting. Still, the reading does appear to show the continuing effects of Brexit anxiety the Inflation in the eurozone dropped to 1.6% last month, from 1.9% in November – the lowest rate since April 2018.

It is a busy week for economic data, with highlights including the balance of trade figures from the UK and US, FOMC meeting minutes, ECB monetary policy meeting accounts, GDP figures from the UK and the American inflation rate for December.

With so much on the horizon, it’s a good reminder of the importance of locking in a fixed exchange rate. Talk to your Personal Trader about a forward contract – at no further cost – on 020 7898 0541.

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