Sterling in torment

Currently trading at 0.85370, EUR/GBP is valued at a 22-month low, heading along 0.85510 short-term. Parliament is expected to start another Brexit vote at 17:00 GMT. The battle between to impose a negotiated Withdrawal Agreement continues. Time is running short: an extension of negotiations would need to be approved by the European Union during its summit next Thursday. An extension until 30 June 2019 might be agreed. We question whether Prime Minister Theresa May’s Withdrawal Agreement or any alternatives are even feasible. GBP-positive scenarios are either an acceptance of the existing Withdrawal Agreement or of an extension.

Two days of intense debates were capped yesterday in defeat for the government. UK Attorney General Geoffrey Cox warned that the country could remain stuck in the bloc’s customs union. Last night Parliament voted not to allow a hard Brexit – but this was non-binding. Lawmakers will be focused on extending the divorce period, accepting May’s deal or staying in the EU.


 

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This report has been prepared by AC Markets 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 AC Markets personnel at any given time. ACM 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.