Pound Gains Due To positive Brexit Talks
- 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
possible.
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.
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