Theresa May is reportedly rejecting a customs union. That is a key demand by the opposition Labour party in the long cross-party talks. If this is confirmed we could see the talks could end shortly and the chances of no deal potentially rise. The red lines from both Tory and Labour are causing continued friction. A customs union is among the many options still on the table, as well as a general election and second referendum which are both being push by the opposition to try and break the deadlock. This news has caused sterling exchange rates to drop this morning against all major currencies. GBP/EUR reached 1.15; a level only reached for a few hours in the last 3 months.
|Currency Pair||% Change (Month)||Difference on £200,000|
The pound has struggled to hold ground against most major currencies, following the little news from cross-party talks. With ministers from both sides debating for weeks, with seemingly little progress.
Employment data and a meeting held by the UK cabinet are likely to remain the main interests for investors amidst an absence of progress on Brexit. The chance of an imminent collapse of cross-party Brexit talks remain; this would leave the UK no closer to achieving a Brexit deal now than at the start of the year. Today the cabinet is expected to have their regular meeting, at which Prime Minister Theresa May is expected to be told by some of her most senior colleagues that is time to pull the plug on the talks.
Mrs May appears to be standing steadfast and determined to press on, and in a sign that she still believes some kind of deal with Labour is possible, she is sending her chief Brexit negotiator to Brussels on Tuesday to discuss possible changes to the non-binding political declaration on future UK/EU relations.
The UK has a series of data out this morning at 09:30; unemployment rate figures are expected to stay at their record low, giving the UK confidence with more people in work and increased production, as compared to the slowing and struggling Eurozone. Average earnings numbers are also on the table this morning, which is a measure of the basic pay and expected to come out at 3.3% from the previous 3.4%. If the figures change from the expected I would expect settlement would change.
With all the Brexit developments coming out this week and tensions still rising. I would recommend a review of your currency requirements by getting in touch with your account manager to time your transfers around events this week.
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