Sterling exchange rates have been extremely volatile over the last couple of weeks due to the upcoming House of Common’s vote on the current proposed Brexit deal- the biggest problem for the Pound is that it seems pretty certain that MP’s will be voting down this current deal and it will not pass through Parliament. As we all know, there is no such thing as a “sure thing” so we will have to wait until Tuesday to determine how this vote goes and the future direction for the Pound- but the way I see it at the moment- there are around 8 scenarios that can occur now.
- Deal gets passed
- The deal gets passed with amendments
- Deal gets rejected (Government then has 21 days to set out new plan of action)
- Walk away with no deal
- Renegotiate with EU
- Second vote
- General Election
- Vote of no confidence
If the deal does not pass on Tuesday, then the Pound is set for at least 21 days of uncertainty- which could weaken exchange rates by at least 3%, maybe more depending on if the EU is willing to renegotiate or not, as a no deal scenario would almost certainly crash the Pound.
In regards to how to navigate this vote- the best suggestion is using market orders- as trying to predict where the market goes a losing battle most of the time- if you have levels you wish to input into the market, please contact me to arrange on Monday at 5pm at the latest as Tuesday is set to be a very volatile day.