Pound jumps as PM May gives Brexit concession

David Cheetham XTB UK

They say a week is a long time in politics, but a day can be a long time for an analyst's comment as after hitting its lowest level since January this morning the pound is now trading higher against all its major peers, with sterling offered a reprieve as PM May laid out her latest Brexit plan. Leaks of the text from her speech caused a sharp move higher in the pound on the headline that MPs would be offered a vote on a 2nd referendum, but when this was confirmed by the PM the caveat that this would be offered in return for allowing her withdrawal agreement bill to pass left a bit of a feeling of an anti-climax.

As the dust settles, it seems that in effect not much has really changed and that this is simply a desperate attempt to garner more support for the withdrawal agreement. As far as the pound is concerned, it remains on course to end the day higher but this is likely more down to an overdue bounce out of oversold conditions rather than a strong fundamental catalyst for a recovery. The question now is whether the move higher is just a dead cat bounce or the start of a sustained recovery.

Author

David Cheetham

XTB UK

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