Boris Johnson has launched an attack on Theresa May due to the current Chequers plan branding the deal “deranged” and “preposterous”. May has responded by stating the Chequers plan is not dead, stating Boris Johnson is “playing Politics” with Brexit. May believes that her plan is the only way in which the UK could guarantee a soft Irish border and smooth trade. More on the potential impact of political uncertainty caused by Johnson's comments and an oulook for upcoming economic data in the market report below.
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It will be a tough week ahead for the PM as the Conservative conference continues this week, and she is expected to be questioned heavily on Brexit and what some believe to be her soft stance on negotiating a deal. This will no doubt have connotations for the Pound; how she handles the tough questions on customs union access and the Irish border deal has the power to influence the market.
Boris is obviously trying to gain control, but is perhaps trying to time his leadership challenge for maximum impact. I think Sterling could be in for a rough week, the last thing needed as talks intensify on Brexit is our leader to be undermined and her leadership be brought into question. It also weakens the UK’s position in negotiations. If you have to move short term selling Sterling I would consider taking advantage of current levels.
Manufacturing Purchase Manager Index (PMI) data is due out this morning and can alter Sterling value so it would be worth keeping an eye on. A figure above 50 indicates growth, anything below that contraction.
There is expected to be an increase from 52.8 to 53.8. If the figure arrives away from expectations expect volatility.
Construction PMI measures the health of the construction sent and does have the power to move markets so if you are trading short term keep an eye on the release. The expectation is there will be an increase from 52.9 to 55. If we see this kind of growth expect Sterling to benefit.
Services PMI is perhaps the most important PMI data release as it makes up the largest share of UK economic output. I would expect to see a slight increase which could prove beneficial for the Pound.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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