Sterling is back under Brexit-related pressure, presently showing declines of just over 0.5% against both the Dollar and Euro, and by 0.8% in the case against the outperforming yen. Cable has printed a low of 1.2756, which reverses most of the rebound gain the pound saw yesterday, with the post Powell high of 1.2849. The BoE’s warning of a significant negative impact on the economy in the event of a no-deal Brexit, along with Chancellor Hammond’s remarks that all versions of Brexit will leave the economy worse off, have been weighing on the currency. This comes with Brexit remaining clouded in uncertainty, despite the EU and UK government having shaken hands on a deal. What does look clear, at least at the moment, is that that deal will be voted down at the December 11 parliamentary vote, with the Labour opposition, Northern Ireland’s DUP party (the kingmakers of the Tory-led minority government), and numbers of Tory party members (mostly from the Eurosceptic Brexiteer cabal) set to vote against the government. Mrs May plods on in the believe that she can wins sceptics over (after all 2 weeks is a life time in politics) or in the knowledge that she and Barnier have something up their sleeves, knowing that the likelihood of the 585-tome passing parliament was extremely slim.
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Head Market Analyst
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