On this symbolic day of 29th March the pound is still proving resilient having seen some spikes throughout the week. Volatility remains high whilst the British constitution is unravelling the process of Brexit. Today had been set as the day that Britain would leave the EU after nearly three years since the 2016 referendum. A vote will now go ahead this afternoon on the withdrawal agreement which will help determine the outcome of Brexit.

Currency Pair% Change in 1 monthDifference on £200,000
GBPEUR2.7%€6,360
GBPUSD2.8%$7,380
GBPAUD2.6%AUD $9,960

The Commons speaker John Bercow restated yesterday that the government cannot bring the same proposition back to parliament for the third meaningful vote. The government has found a way round this by voting only on the withdrawal agreement and not the political declaration. The withdrawal agreement tackles the divorce settlement and the contentious Irish backstop.

Sterling Outlook Uncertain before Vote in Parliament

If the deal is voted through then the pound may strengthen although the outlook is still far from clear. The Prime Minister has stated that she will stand down “before the second phase of negotiations,” but no date has yet been offered. The top job will then almost certainly go to a Leave supporter which could result in renewed direction in the negotiations which will tackle the thorny issue of trade. This is likely to cause more volatility for sterling exchange rates for the foreseeable future whilst a trade deal is thrashed out.

If the withdrawal agreement does not pass then it opens the door to a long extension, a general election or a no deal Brexit on 12th April. With parliament still gridlocked a general election could start to look like a serious possibility although whether that would break the impasse remains questionable.

UK GDP figures to be released

UK Gross Domestic Product numbers are released this morning at 09:30 but will inevitably be overshadowed by all the latest political developments.

Clients with pending requirements would be wise to get in touch with the trading floor to consider taking the risk out of the volatile currency markets in these rare times in British politics.

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