Sterling fell to a two and a half week low yesterday as fears mounted that Theresa May’s leadership would be challenged this week following an inability to resolve the Irish Border issue.

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR0.46%€1060
GBPUSD1.12%$2920
GBPAUD0.78%AUD $2860

The main headline yesterday was that the Democratic Unionist Party of Northern Ireland, who backed the Conservative Party to form a coalition in the UK were going to block Theresa May’s plans to create a backstop for the Irish border. 

Theresa May turns to domestic battle

These rumours have led to sterling coming under immense pressure as we start the week, losing nearly a percent against a strengthening dollar yesterday at the day high compared to the day low. 

Yesterday afternoon, Theresa May tried to calm the markets by addressing the House of Commons and intended to ‘break the impasse’ in a four point plan that would hopefully move negotiations past the Irish Border issue. However, last night Guy Verhofstafh, EU Parliament Brexit chief rejected her plan, as the plan breaches her commitments to the Irish border. 

Brexit set to remain in the headlines this week

With little noticeable data out for the U.K. this week, all eyes are firmly fixed on Prime Minister Theresa May. Andy Haldane, a monetary policy member will deliver a speech at 9.30 this morning, however his comments are likely to be overlooked with developments surrounding Brexit.

As we start today, the Prime Minister ended yesterday’s talks by saying a deal was ‘95% reached’, but the Irish border remains an issue. I do feel as though her leadership now lies in her ability to keep all parties, including her own satisfied with regards to the Irish Border issue and if she doesn’t, GBP could majorly suffer as a result.

At such crucial times, it would be a good idea to get in touch with your broker to set out a plan of action for each possibility regarding Brexit. 

Download our monthly currency forecast

Download here

News

Read more articles
Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.