The Supreme Court judges have now returned from their Christmas festivities which means a decision in regards to whether UK Prime Minister Theresa May has the power to invoke Article 50 or if she needs to seek Parliament approval is looming. The Supreme Court judges heard the Governments appeal in December, and as the appeal was televised many of the National newspapers predicted how they thought the result would pan out.
At the start of the hearing the general consensus was that Mrs May’s team would lose the appeal and only one judge would vote in her favour. However, to date reports are suggesting that the hearing went well for the UK Prime Minister and actually she has a chance of having the High Court’s decision overturned. Many national newspapers are now reporting a 7-4 loss, however 2016 was the year of surprises could 2017 be more of the same?
For clients purchasing a foreign currency in the foreseeable future, this decision could have a serious impact on your exchange rate. If the newspapers are correct we could see a small spike for sterling as it becomes more difficult for Theresa May to trigger Article 50 and leave the single market in March. However, if we see the first shock of 2017, I wouldn’t be surprised to see the pound plummet in value as Theresa May’s March deadline becomes more likely. Consequently, if you need to purchase a foreign currency short term the safe option would be to trade sooner rather than later.
Regardless of the outcome of the Supreme Court, Theresa May’s press conference last Sunday gave direction to how she plans and believes the UK will leave the European Union. She told Sky News that the UK can’t keep ‘bits’ of its membership which to me confirms she has no interest to negotiate in the Houses of Parliament and she will continue to go down the route of a ‘Hard’ Brexit.
Furthermore, it has been reported that the Government have prepared numerous bills in anticipation the decision does not go in their favour. The PM since she took the position would have had Brexit on the mind 24 hours a day, 7 days a week and she will want to get this story wrapped up so the UK can move forward. Hence, I expect she will do her best to stick to the March deadline and in turn the pound will continue to struggle over the next couple of months until the UK leaves the European Union.
To discuss how future data releases could affect exchange rates please call our trading floor on 01494 725 353 or email me directly at email@example.com.
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