Teresa May travels to Brussels today to try and secure last-minute changes to the backstop agreement after Attorney General Cox failed to make a breakthrough last week, ahead of this weeks planned vote on the Withdrawal Agreement.
- Prime Minister May is expected to hold another ‘meaningful vote’ by Tuesday, followed by two more votes on ‘no deal’ and an extension if her Brexit deal fails to pass
- An extension of Article 50 currently appears to be the most likely outcome of the series of Brexit votes and appears to have been already priced into the market.
- Should there been an un expected result we should see significant GBP movement.
The Cable exchange rate opened the week trading @1.30, following a sharp decline Friday afternoon, which saw the pair lose around a cent of its value. At the time writing GBP/USD has improved to over 1.31, as rumours have circulated today the EU could be about to offer the UK a last-minute deal at a possible meeting between Theresa May and Jean-Claude Juncker. The next key event will be the result of tomorrows Vote on Theresa May’s Latest withdrawal agreement, whilst this is most likely to be defeated the margin of defeat could prove key to the GBP/USD rate initially.
Like Cable, GBP has performed very well against the single Currency throughout Monday. Having opened trading @1.1563 it has appreciated to @1.1661 at the time of writing, an increase of close to 1%. Coupled with Brexit rumours as mentioned above, and some negative economic data being released by Germany and Spain, the pound has had a great day against the Euro. However, we do expect these gains to be short lived and lost tomorrow evening, as all eyes turn to the result of the Withdrawal agreement Vote in the House of Commons and more specifically the margin of the expected defeat for Theresa May’s Government.