- Posted by Shyam Gokani in Bank of England, Brexit, Currency, Economy, EUR, GBP, Referendum, Sterling, UK, Uncategorised
- February 20, 2017
- No Comments
The pound rose against most major currencies this morning, snapping a three-day fall versus the euro, at the start of another week likely to be dominated by questions about how Britain will leave the EU and the impact of Brexit on the economy.
The upper house of parliament, known as the House of Lords, was set to begin debating the bill which will pave the way for the formal start of talks on how Britain will leave the European Union, the triggering of Article 50.
The Article 50 debate in the Lords could be more interesting than expected. It does seem that there is a bit more of a push for amendments.
Former prime minister Tony Blair last week urged Britons to “rise up” and block or soften Brexit, but it may now be out of their hands — many Europeans just want them to get on and get out.
While officially the door remains open for Britain to stay, many on the continent would not welcome a U-turn now.
Sterling volatility contracts, which give traders the options to bet on large swings in the pound, have fallen in recent weeks, suggesting markets expect no immediate drama when Britain does formally trigger Article 50.
The pound has been drifting lower versus the dollar since mid-January when British prime minister Theresa May sketched out her first real Brexit plan.
But it has climbed 4 percent against the euro as the shared currency has faced its own strains from political uncertainty in France and the Netherlands and Greece and Italy.
UK economic data is showing signs of stumbling. Asking prices for UK homes saw the smallest February rise since 2009, data from online property site showed on today.
Business industry data is due at 1100 GMT that should show whether the weaker pound is still benefiting exporters.
On Tuesday, the head of the Bank of England will be grilled by a parliamentary select committee, while on Wednesday the UK’s official statistics office will publish a revised reading of fourth quarter GDP figures.
Interesting week ahead.