D-Day for the pound

10 December, 2018

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.

Even though a majority of the market predict that the deal will be voted down, in recent day’s UK Prime Minister Theresa may has gain support of her deal from previously skeptical colleagues which means that the deal still has a chance of passing.

With all this in mind it is a day not to be missed by currency traders looking for one of the more volatile days in recent times.

 “That’s one of the SNB lessons learned, there were a lot of less experienced people on the desk,” said Alan Schwarz, New Jersey-based CEO of FXSpot Stream LLC, a trading venue launched by banks. “I will guarantee you a lot of the most senior people at the banks will be at their desk or will be able to get to it.”

The pound could rally more than10c if the bill unexpectedly passes while if it fails by a huge majority of votes the chances of the currency diving below $1.20 are areal possibility.

In any case this is day is seen as an important milestone for the British pound.

“The vote could be construed as more important than an election in terms of pound implications,” said Neil Jones, head of currency hedge fund sales at Mizuho. “Depending on the outcome, cable could move more than through an election result.”


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