Sterling rates have been trading at highs recently as fears of a “No Deal” Brexit have started to wither away- however as last week ended, it seemed that those same fears had returned to the market- pushing GBPEUR below 1.16 and GBPUSD under 1.30.
On Tuesday 12th March, MP’s will be asked to vote on Theresa May’s deal again, however, it seems that the deal is still no different to the last time they voted, so the expectation is that the deal will again be voted down. This in itself will put a lot of volatility into the Pound and potentially push the exchange rates down.
If the deal gets voted down on Tuesday, then there will be another vote on Wednesday on whether MP’s would approve a “No Deal” Brexit or opt to extend Article 50, if the latter is voted for, then I would expect the Pound to surge again on this in the short term. The main issue about Brexit has been leaving without a deal, once this fear is eradicated, there is more certainty in the markets.
Unfortunately, this week, economic data will be irrelevant as the markets will be watching politics to drive the currencies- so if you do have an upcoming transaction that you wish to discuss, please don’t hesitate to contact me directly for a strategy to navigate this week.