UK PM May’s testimony on Brexit in focus – MUFG

Lee Hardman, Currency Analyst at MUFG, suggests that the main focus today for the pound will be on the upcoming testimony from UK Prime Minister May who will be questioned by the House of Commons Liaison Committee about her plans for leaving the EU.

Key Quotes

“At the current juncture it is unclear whether she will provide further insight into the government’s Brexit plans. Her comments have the potential to be market moving for the pound which remains very sensitive to Brexit developments. The recent easing of hard Brexit fears has helped the pound to rebound modestly.”

“In comments before parliament yesterday, Prime Minister May did not rule out striking a transition agreement and/or continuing to pay into the EU budget to maintain access to the single market. She reiterated that she recognised “the desire for business to be able to have some certainty beyond the point of leaving the EU”, and “what’s important is that when we leave the EU, it’s the British government that decides how taxpayers’ money is spent”.”

“International Trade Secretary Fox suggested over the weekend as well that Britain could model its post-Brexit relationship on Turkey’s trade deal with the EU, with some parts of its economy inside the tariff sharing customs union. It appears to mark some softening of his previous hard Brexit stance.”