In last week’s article, I mentioned there was potential for an uptrend in GBPEUR exchange rates- and fortunately, we have seen the third week of consecutive gains for GBPEUR. There was short term volatility during the week following Boris Johnson asking the Queen to suspend Parliament for five weeks from mid-September (Pretty much up to the Brexit deadline). MP’s will not return to Parliament until 14th October, when they can debate Brexit and whichever outcome the PM is choosing for the UK.

We initially saw some Sterling weakness, however, this was reversed following further comments from Boris Johnson who seems to be keen to make a deal. It is now very up in the air about how things will turn out with Brexit, but we don’t have long left to find out!

This week could well be another positive one for Sterling- however, with Parliament returning to the House of Commons attempting to block a No Deal Brexit- we are almost guaranteed an explosive week of volatility on the markets.

Boris Johnson’s move to suspend Parliament has definitely angered many MP’s, even within his own party. This has led MP’s to want to present a piece of legislation this week that would remove the option of a No Deal Brexit, which would frustrate the PM and effectively ruin his negotiation strategy. If there is a chance this legislation could pass, then we could see Sterling rise further. However, without No Deal on the table, it seems unlikely the UK will get the deal they want, it also lessens the likelihood of MP’s voting through the deal they are presented with.

It is also worth keeping in mind that Jeremy Corbyn could also table a vote of no confidence- which currently seems like it could be successful given the amount of rebel Tory MP’s who are against a “Hard” Brexit. Press reports suggest that Johnson will look to expel these members from the Conservative party – a no-confidence vote would be extra volatility which could effectively weaken Sterling further.

Moving onto data, this week UK Manufacturing and Construction PMI are supposed to show a rise, with services PMI falling slightly, which should be a non-event for Sterling.