Swissquote Bank Research Team
Swissquote Bank Ltd
A Brexit delay looks likely, but this does not necessarily give a resolution. If the new European Parliament votes in May 2019 not to give further concessions to the UK, including on the Irish backstop, a second referendum or even general elections in the UK are likely. For now, long GBP trades are highly speculative, although the risk of a hard Brexit is subdued for now. Traders should not get hypnotized by the hype: Brexit has now migrated from the logical to the political, making predictions merely guesswork.
Although investors are currently supporting a bullish GBP bias, that trend could rapidly change. The next event will be presentation of a Brexit Plan B later today: its reception remains highly uncertain. Postponement of the current Brexit deadline of 29 March 2019, which would require approval of the EU members, remains the most realistic solution for now. This would allow the UK to buy three more months, until EU elections kick off on 23 May.
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This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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