Brexit: Still More Questions Than Answers

Xe Corporate Europe

April 1, 2019 3 min read

The Pound ended the week on the back foot after Theresa May failed for the third time to get her Brexit deal approved by the House of Commons. The currency dipped lower as investors/traders moved out of the Pound as the chances of a no-deal Brexit rose. The next official Brexit date is now the 12th of April.

The Pound

The direction of the Pound will continue to be driven by Brexit as the House of Commons prepares for a second round of indicative votes this evening. They will be voting on 8 potential outcomes, a customs union being the most watched as this was the scenario that gathered most support in the previous round of indicative votes – missing a majority by just 6 votes. The DUP’s position remains unchanged and will not back the PM’s deal until the backstop agreement has been changed.

This week the focus will be on the Purchasing managers surveys for construction, manufacturing and the biggest sector – services.


The Euro is weaker and looking fragile after some poor economic data from both Germany and France last week.  This was followed up by comments from the ECB President Mario Draghi who said the economic process or policy they have been engaged in has now been delayed but not derailed by the global economic situation and Brexit uncertainty. The single currency has lost some value in the past few weeks as the central bank have started considering easing monetary policy again, a U-Turn on the stance taken late last year to taper QE.

US Dollar

The US Dollar is stable at the start of the week after a week of poor economic results and growing tension between president Trump and FED chair Jerome Powel. Personal consumption expenditure, US consumer confidence and Q4 GDP numbers all missed expectations last week. This prompted president Trump to tweet that the FED had mistakenly raised interest rates too early and QE tightening had been ridiculously timed.

This week the focus in the US will be non-farm payroll numbers on Friday – this is expected to be a significant improvement on the previous reading of just 20k.

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