Last week Sterling had its best week against the US Dollar since March and strengthened nearly two cents against the Euro following the High Court’s ruling that Theresa May must seek parliamentary approval before she starts the UK’s divorce from the EU. Her defeat last week has helped to raise investors’ hopes of Theresa May adopting a softer stance when she is negotiating the UK’s leave, scheduled to start next in March next year. This could now present a further period of volatility and uncertainty for clients with Sterling, holding votes on the invoking of article 50 could be a turbulent time. Although investors have welcomed the news that she will have to go to parliament, this could cause further uncertainty and possible Sterling weakness in the long term.
Further cracks have appeared in Theresa May’s government – Stephen Phillips, a conservative MP and pro-Brexit campaigner unexpectedly quit, citing growing and significant differences within her government.
Theresa May has since told European leaders such as Francois Hollande and Angela Merkel that she was committed to invoking article 50 by March 2017 in spite of the possibility of a long fought war between parliament over Brexit. Jeremy Corbyn, leader of the Labour Party has increased the fears of parliamentary warfare by stating that he would not obstruct the UK’s decision to leave the EU unless Theresa May adopts his terms, full access to the EU market and the protection of workers’ rights.
I would expect this to dominate the headlines for the next couple of weeks with a number of twists and turns yet to come. The Brexit debate has been something that we have been covering here at currencies.co.uk now for most of the year. If you are thinking about moving your money overseas for a house purchase in France or Spain, why not talk to our knowledgeable team here to discuss the effects of how the Brexit could affect you.
As I have previously mentioned, I expect the latest news regarding the high court ruling that Theresa May must go to parliament before invoking Article 50. Politically elsewhere, the eagerly anticipated US election will draw to a close on Tuesday night. Financial markets were rattled last week amidst fears that Trump had caught up with Clinton in the polls. Economically, this week the Office for National Statistics will release UK manufacturing figures on Tuesday, with expectations for a gain of 0.4% for September. This could help Sterling to further recover some of the losses it has encountered of late.
Thank you for reading my Pound report this morning, for any questions on how this week could impact your buying requirements email me here or call our trading floor on 01494 725 353.
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