- Posted by currencies in Bank of England, Bremain, Brexit, Budget, Currency, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Prime Minister, Referendum, Sterling, UK, Uncategorised
- May 7, 2019
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Sterling was the star
winner last week as boosted by renewed hope of a Brexit deal between the
government and opposition. Poor results for both Conservatives and Labours are
piling pressure on both parties to end the Brexit standoff and drama as soon as
Prime Minister Theresa May stepped up calls on Labour leader Jeremy Corbyn to agree on a cross-party deal to leave the EU. May said in a Sunday newspaper party: “To the Leader of the Opposition I say this: Let’s listen to what the voters said in the local elections and put our differences aside for a moment.
Let’s do a deal”. May is expected to offer new concessions to Labour as talks with restart on coming Tuesday. It’s perceived that both sides are getting closer and closer and a deal could be done within days.
Sterling surged past $1.3150 on Friday after the leader of Britain’s opposition party said parliament must break the deadlock over Brexit and “get a deal done” to exit the European Union.
It also rallied to a one-month high against the euro as broad dollar weakness prompted investors to cut short positions heading into a long weekend with Britain shut for a local holiday on Monday.
Investors have been broadly impervious to tepid economic data this week and relatively hawkish comments from the Bank of England at a policy meeting on Thursday.
The BoE said on Thursday that markets should expect interest rates to rise more in the next few years than they currently assume, if the economy grows as policymakers expect and inflation is brought back to target.
Trading in the pound has become far less volatile as investors sit on the side-lines while British politicians try to find a way out of a deadlock over Brexit.
Britain will not leave the EU until possibly the end of October after London and Brussels agreed a delay.