- Home
- Blog
- Currency News
- EU's Willingness to Grant Brexit Extension Remains Undetermined
EU's Willingness to Grant Brexit Extension Remains Undetermined
20. März 2019 — 2 min read
Overview
Sterling held in tight ranges overnight, as markets struggle to digest the consequences of a moratorium for the previously expected third meaningful vote on the latest iteration of the government’s withdrawal agreement.
UK
The Prime Minister will now request a short delay to the 29th March exit date, in a bid to allow Parliament sufficient time to agree a way forward. While this is in principle a good thing for GBP (in that it reduces the risk of the no deal scenario), the EU’s willingness to grant such an extension remains undetermined. If an extension is granted, but no fundamental change to the current withdrawal looks likely, then a short extension does not materially reduce the chance of the no deal scenario.
Brexit has routinely overshadowed economic data releases over the last few months, and yesterday was no different. In the absence of Brexit news, GBP would have been buoyed by news that UK unemployment fell to its lowest level in 44 years (3.9%). It should be noted, however, that the data is lagging, relating to Q4 2018 only. Much may have changed since.
Euro
Yesterday’s ZEW survey indicated improving mood among German investors, helped by the notion that Britain’s exit from the EU may be delayed. EURUSD ended the day modestly higher.
US Dollar
The USD rose overnight on speculation of some tension in the ongoing US-China trade talks. The FOMC is expected to signal caution in its monetary policy statement later today, reiterating the notion that the central bank is in wait and see mode with regard to further rate hikes.
Please contact us for more info about your international payments, or click here to register and save now.
Please Note:
The information, materials, accompanying literature and documentation available on our internet site is for information purposes only and is not intended as a solicitation for funds or a recommendation to trade. XE, its officers, employees and representatives accept no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.
For more information about XE, please click here: Regulatory Information