Brexit or No Brexit?
By the look of the dichotomous questions spreading across the globe, the first casualty of ITV’s I’m a Celebrity, Noel Edmonds, may have headed to Brussels. At the European market open this morning, the Pound Sterling rallied, gaining as much as 0.35% throughout the morning. The news that propelled the Pound high enough in order to recover its losses for the last week stemmed from a decision in European that Brexit is reversible. In other words, the legal precedent for the withdrawal of Article 50, the legislature contained within the Lisbon treaty that was invoked by the Prime Minister in order to begin the Brexit process, can simply be undone! Markets responded by awarding the Pound with value. But why? Well, on the European side of things the addition of another possibility improves the leverage that the UK has in order to maximise the value of its chosen outcome. However, looking at the all-important vote in the House of Commons next week, it is clear that showing Europhile members of the lower house that there is the possibility of undoing Brexit entirely could entice them to vote against May’s deal, weakening Sterling. Consider the case of an MP who finds a Brexit an abhorrent concept – until this morning’s confirmation of the legal precedent to unwind the motion, the member has the following options: vote against the deal and risk a catastrophic no-deal Brexit, or vote for the deal and leave wounded. Now the law maker has another choice: vote again and possibly avoid a Brexit altogether. As such the expected outcome of the vote on the 11th December has necessarily deteriorated and convincing MPs to vote with the Prime Minister may have just become that bit harder.
Today’s Global Market:
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – Opportunity for a weaker Dollar
Charles Porter
Thu 1 Jun 2023
Opportunity for a weaker Dollar The passing of month-end allows markets an opportunity to reassess currency valuations. Despite a cooling off within the Dollar as forecasted following the agreement between the White House and Kevin McCarthy, month end flows yesterday showed favourable conditions for a short-term Dollar resurgence. The beginning of June coincided with headlines […]
Morning Brief – Turkish Lira
Humphrey Percy
Wed 31 May 2023
Turkish Lira While President Erdogan removed the uncertainty overhanging the Turkish market by winning the election in the run off over the weekend, the news served to cement the certainty that nothing much was likely to change with respect to Turkish economic policy or indeed the subservient role of the Central Bank of Turkey to […]
Morning Brief – Did EURUSD miss the news?
Charles Porter
Tue 30 May 2023
Did EURUSD miss the news? Over the weekend, the President and the Speaker of the House of Representatives reached a much-awaited deal on the US debt ceiling. The impending constraint on debt could have forced the shutdown of government departments and precluded the US government from servicing costs and existing debts, triggering a default. The […]
