GBP: Politics and Brexit uncertainty continue to weigh - Westpac
|Tim Riddell, Research Analyst at Westpac, suggests that Brexit and UK’s political uncertainty continue to weigh on GBP.
Key Quotes
“PM May’s post-Brexit plans have heightened divisions within her minority Conservative Govt. Every amendment vote on the plan now carries the risk of failure and a destabilising leadership challenge.”
“So far the plans are scraping through. If passed, discussions over actual exit could resume, notably over the Irish border. That would be seen as providing a softer Brexit, probably with a longer transition period, and would lift GBP. However, Parliament’s summer recess is imminent and so any failure will increase the sense of uncertainty and weigh on GBP.”
“Brexit remains a concern, but recent activity data have been solid and Carney’s seems more confident on the economy. Despite the pull back on lower CPI, potential for an Aug. 25bps rise remains high, though probably stressing BoE’s gradual (dovish) guidance.”
“Unless an actual political crisis develops, GBP/USD’s risk-driven 1.28-1.37 range should hold and allow for interim but limited rebounds, given current USD strength.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.