Damian Hinds and Secretary of State for International trade Liam Fox, both allies of Theresa May have called for a vote in the House of Commons over alternatives to the current deal.

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR3.07%€6,760
GBPUSD3.33%$8,320
GBPCAD2.60%$8,700

The alternatives to be considered will range from a No Deal Brexit to a potential Norway Plus deal.

In its current form it is common knowledge that it would be rejected by the House of the Commons, hence May delaying the vote.

May is currently rejecting calls for a vote and is standing by her current deal despite being stone walled last week in regards to future negotiations. She said the so called indicative votes are divisive.

European Commission President Jean Claude Junker stated the following: "We don't want the UK to think there can be any form of renegotiation, that is crystal clear. We can add clarifications but no real changes. There will be no legally binding obligations imposed on the withdrawal treaty".

Corbyn stated yesterday that unless May gives a firm date for the vote he will issue a leadership challenge.

May responded by providing the latest date possible of the week commencing 14th January.

Corbyn then put forward a motion of no confidence in the PM, a rather pointless move as it is not a vote of no confidence in the Government as a whole, but one in the PM herself. May can ignore it without allowing any debate or vote. The farce did little to alter sterling value.

There is a complete lack of clarity over the current situation. We could be facing a second referendum, a general election a no deal or May’s deal could be accepted. The majority of which could well cause further sterling weakness. If you have a requirement involving selling the pound it may be wise to take advantage of current levels. The pound could remain fragile for some time.

UK CPI Data – Wednesday 19th December

Consumer Price Index (CPI) is a measure of inflation and can influence monetary policy. I think Brexit will continue to dictate the pound’s value but if CPI data arrives away from expectation we could see market movement. There is expected to be a small increase from last month’s 0.1% to 0.2%.

Uncertainty as the Markets Await a Result on the Vote

BOE Interest Rate Decision & UK Retail Sales- Thursday 20th December

Retail sales data is due out on Thursday and could give the pound a boost as there is expected to be an increase from - 0.5% to 0.3%. Considering the current state of the pound this could be a small window of opportunity.

Thursday will bring the Bank of England (BOE) Interest rate decision. I would be very surprised to see a hike considering the current economic climate, however the BOE minutes could prove interesting. The minutes gives the Monetary Policy Committee (MPC) the opportunity to justify their decision and can sometimes provide a hint to any future changes in Interest rates.

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