Sterling remains weak against the majority of major currencies due to political uncertainty and the lack of clarity surrounding Brexit.
|Currency Pair||% Change (Month)||Difference on £200,000|
The UK has no PM and remains in complete Brexit Limbo. Political uncertainty often acts as a catalyst to a weakening currency. Boris Johnson is favourite to gain the role of Prime Minister and he has stated he will be willing to take Britain out of the European Union if a mutually acceptable deal cannot be reached. He is aiming to use the threat of a no deal scenario as ammunition to gain concessions from Brussels on the current deal on offer.
Johnson has gone as far as to say “We are getting ready to come out on 31st October. Come what may. Do or die.” He has made it clear that he does not wish to go down the route of an extension.
Brussels has stated on many occasions that there will be no renegotiation of the deal currently on the table, something that is seemingly being ignored by British members of parliament.
The general consensus amongst market analysts is that there is a direct correlation between a higher higher probability of a no deal Brexit and a weaker pound. This does not bode well for the pound. Those with a requirement for selling sterling in the coming weeks should be aware of the developments in the struggle to select a UK Prime Minister.
UK Gross Domestic Product (GDP) data is released later today and there is expected to be little change. Year on Year figures are set to remain unchanged at 1.8%, and it is a similar situation with month on month set to stay at 0.5%. Should the data release land below expectations this may cause some sterling weakness.
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