The Pound has put in a poor performance today, spending time at 20-month lows versus the US Dollar (GBP/USD) and three-month lows against the Euro (GBP/EUR). GBP/USD has dropped under the $1.26 barrier for the first time since June 2017 with Sterling slipping by 1.60%. Brexit uncertainty has played havoc with the Pound, and today’s press conference by Theresa May at 3:30pm deferred the vote on the Brexit withdrawal agreement scheduled for tomorrow, as it was set to fail.
Theresa May posed the very loaded question, ‘Does this house want to deliver Brexit?’ and suggested a new referendum would divide the country again. The British Prime Minister suggested she would hold emergency talks with EU leaders to discuss potential changes to the Irish backstop which has been a sticking point during negotiations. However, recent comments from the EU suggest this is the only deal possible, meaning changes to the deal would likely be very difficult to secure. Because of today’s developments, Sterling exchange rates could be under pressure for some time to come, with the potential for the vote to be rescheduled for mid-January.
The debate in Parliament is ongoing and is likely to create significant volatility today and tomorrow.
To discuss how this market movement could affect you, or how you can protect your funds from further volatility, contact your Dealer or call +44 (0)20 7989 0000.
Interbank levels so far today (correct as of 16:05):
GBP/USD – 1.2506 – 1.2759
GBP/EUR – 1.1003 – 1.1161
GBP/AUD – 1.7414 – 1.7724
GBP/CAD – 1.6760 – 1.6971
GBP/NZD – 1.8183 – 1.8594
GBP/CHF – 1.2378 – 1.2610
GBP/JPY – 141.173 – 143.707