Brexit Uncertainty Continues to Dominate British Politics

Xe Corporate Europe

October 24, 2019 3 min read

A briefer Brexit update today, given we are awaiting the details from the EU as to how long they will provide in an extension - if indeed an extension is what they see fit to grant. This does look like it has been provisionally agreed there is a further vote to come on Friday with the final result. France is pressing for a shorter extension - something that will play towards Boris Johnson's preferred outcome, meaning that he may not invoke a general election. However, many other nations would prefer to offer the three month extension that the UK did actually ask for (but didn't really want.) Tempers continue to fray between the DUP and Parliament, the former branding the approach to talks discussing their border issues as 'despicable' and a 'betrayal'.

Mario Draghi’s supervision of the European Central Bank draws to a close with his final rate setting appointment due today.  Mario - nicknamed 'Super' Mario for the saving of the single currency post Global Financial Crisis being widely attributed to him, had a tumultuous reign. Adopting the Presidency in 2011 from Trichet, he quickly set about attempting to prop up a financial system in ruins and using 'any means necessary' - to the chagrin of (largely) German traditionalists who believed the role of the Central Bank is to regulate inflation only. Many hailed him as a saviour of the bloc, though many of the tools he employed during his tenure,including quantitative easing, were largely theoretical in how they affect the economy - and it can be argued still are. Christine Lagarde, former IMF President, will take over the role and one cannot help but wonder, after using all the tools in the toolbox during Draghi's time and the inflation rate having not been under control at all during the entire time - what does Lagarde have to work with?

Today, he is expected to keep the rate unchanged today at -.5%

The States in summary, BBVA analysts have maintained their forecast of 2.2% for the total growth of the US economy in 2019 and a deceleration to 1.5% in 2020. They note that trade tensions have been weighing on capital spending and sentiment. There exists some murmurs of concern that these forecast slowdowns are beginning to spill over to the services sector. Labour appears to be softening but overall consumer fundamentals remain within adequate levels. All this really means is that the economy there appears as if it is tracking as predicted; strong this year, a little weaker next year.

Key rates today:
GBPUSD - 1.2922

GBPEUR - 1.1596

EURUSD - 1.1144

The figure is based on the live mid-market rate, correct as of 09:00 GMT on 24/10/2019, and are provided for indicative purposes only. Live mid-market rates are not available to consumers and are for informational purposes only. The rates we quote for money transfer can be selected via the page on our website ‘Live Money Transfer rates’.

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