Today could be a very volatile day for the Pound as markets prepare for the next wave of uncertainty in the Brexit saga.

Brexit countdown

As the triggering of Article 50 looms, it appears the economic meltdown predicted if Britain voted to leave the EU was just a fantasy dreamt up George Osborne’s head. We were told tumbleweed would billow through deserted high streets up and down the country, the FTSE would crash and unemployment would soar.

However, after seeing the FTSE 100 closing at a record high earlier this month, unemployment at its lowest levels in more than a decade and employment at its highest since 1975 we appear to be worlds apart from pre-Brexit predictions.

Yesterday evening it was announced Theresa May had signed the letter confirming the UK would be leaving the EU. The letter is expected to be delivered to European Council President Donald Tusk at 12:30pm and will officially trigger Article 50 of the Lisbon Treaty. Even to this moment there is a vast divide between even the biggest of banks, with Barclays forecasting GBP to rally whilst Deutsche Bank are predicting the polar opposite. As the announcement draws closer GBP has suffered, seeing a fast sell off yesterday as investors look to protect their positions, surrendering the 0.7 cent and 1.2 cent gains made against the Euro and US Dollar respectively on Monday earlier this week.

I believe Theresa May’s speech today has the potential to send GBP rates in either direction, are we heading for a soft or hard Brexit? How confident does she sound? The answer to both questions will determine where GBP moves going forward. If you have a GBP requirement it may be prudent to execute your trade beforehand, giving you peace of mind.

Sturgeon 2nd Independence Referendum vote backed

Yesterday at 17:15pm Nicola Sturgeon’s motion, setting out foundations for a second independence referendum was passed by 69 votes to 59. Giving the First Scottish Minister the power to trigger an official demand to Theresa May to begin talks over Section 30. As the first steps towards a second Scottish independence referendum have now been taken we may see the possibility of a UK union split hover over GBP, limiting any substantial gains made against its counterparts in the long term.

Economic data releases

Whilst the triggering of Article 50 will be taking centre stage this week, Friday at 8:30 sees a flurry of data releases including Gross Domestic Product (Q4), Total Business Investment (Q4) and Current Account Balance (Q4) all of which could give the opportunity of short term spikes for our well-informed clients with a GBP requirement to act upon. It may be wise to contact your personal broker here at Foreign Currency Direct ahead of these releases to ensure you are in a position to execute a trade immediately should rates begin to move in your favour.

Get in touch with us as early as possible so we can help you plan around the Article 50 announcement. Call us on 01494 725 353 and one of our brokers will be happy to assist you.


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