Pound may hit post Brexit levels

17 August, 2018

The British pound has now had its worse run since the global financial crisis and according to some analysts the pain may be far from over.

The currency has now fallen for the last 11 trading sessions as the chances of a no deal Brexit grow which would see the UK crash out of the European Union, which would throw the country into financial turmoil.

The market is now pricing in a 50-50 chance on a deal being reached over Brexit and they see the sticking point being the British Parliament, which has the final say on any negotiations. If the government does reject any deal the British pound hit levels lower than it reached immediately after the Brexit vote.

“The risk of Parliament rejecting any deal put in front of them late in 2018, or early in 2019, is increasing,” said John Wraith, head of U.K. macro rates strategy at UBS Group AG.

“This puts both the agreement on future relationships and the transition period after the end of March 2019 in serious jeopardy. If the prospect of no deal gains momentum, there’s bound to be bigger moves ahead.” He added.

It’s not just Brexit that is affecting the pound at the moment. External political factors are also playing their part such as the crisis in Turkey which currently has a riff with the US over the jailing of a US pastor which has led the introduction of sanctions by the US and caused the Turkish Lira to plummet.

"The pound seems to be unraveling against the US dollar due to a confluence of factors," said ING currency strategist Viraj Patel.

"While there's the obvious Brexit story, the recent move lower has been a global move. Broad emerging market turmoil is spilling over into a strong US dollar, especially against European currencies." He added.


Source link  
Aussie dollar up on Chinese data

The Australian dollar remains firmly above the US70c mark in today’s trading session after a strong round of data out of China alleviated...

Pound may hit $1.37 by years end

The British pound is expected to face increased volatility over the coming months as the deadline approaches for the UK to leave the EU at the end...

Has the US dollar peaked?

The US dollar has made significant gains against all the major currencies over the last month as worries over trade tensions between...


Pound may suffer in the long term

The British pound continues to power ahead in today's trading session after yesterday's developments in the British parliament that many see as ending...

Gold needs to remain above $1300

The gold price has staged a substantial rally since last week after the US Federal Reserve latest board meeting where they stated that any move...

Only way for oil is down

The oil price has now broken down through the all important $50 mark, which is a physiological blow to any chance of a rally, and according to...


D-Day for the pound

Traders and Fund managers alike are expected to be glued to their desk on Tuesday evening UK time as the British parliament vote on the Brexit Deal put before them...

Will gold's rally continue?

After spending the majority of November range bound, the gold price has finally broken out to the upside as investors seek out safe havens from the anticipated...

Dollar could weaken for years

The US dollar has been the star performer in the currency markets this year, gaining solidly against all the major currency but some are beginning...

  


Share it on:   or