The Pound Remains Sensitive to Brexit Uncertainty

Xe Corporate Europe

September 30, 2019 3 min read

Sterling has started the week on slightly stronger foundations, it has regained the 1.23 level after having dropped below it at the back end of last week. There is an air of urgency of late with regards to finding a conclusion to Brexit.

As the Conservative Party Conference kicked off in Manchester yesterday, Health Secretary Matt Hancock insisted that we must “get Brexit done”, which in his eyes, may well mean leaving the EU without a deal. Hancock’s opinion is slightly contradictory to his previous beliefs, where he first positioned that it was not even an option for the Government to consider.

This morning, Finance Minister Sajid Javid has commented that he is hopeful that we leave with a deal, but ultimately echoed those comments by Hancock where leaving without a deal is still possible, to “appropriately” leave on the 31st October.

With the Pound continuing to be highly sensitive to politic comments and sentiments, focus for its movements will be centred around the Conservative Party’s Conference, to see if there are any fresh steers on how the Government intends to deliver Brexit by the 31st October.

Boris Johnson’s upcoming speech on Wednesday will also be a noteworthy highlight for shifts in Sterling.

Today, UK opposition leaders will be meeting, looking to force Boris Johnson to ask for an extension as early as this weekend, by changing the law to bring the date forward when the Prime Minister legally must ask Brussels for an extension.

UK GDP has come out this morning at higher levels than expected, which has seen the Pound move higher. Outside of the UK the market will be looking at German inflation figures for guidance on the Euro, recently we have seen a dramatic slowdown in the German economy which has seen EURUSD move to multi year lows, further negative data could see the pair move lower still.

GBP/EUR– 1.127

GBP/USD– 1.23

EUR/USD– 1.093

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