May Struggles to Keep Brexit Deal Afloat

Sterling is set to experience further volatility as PM May begins to sell her Brexit deal.

Previous Day's Market Highlights

The aftermath of the cabinet resignations continued from Thursday, with markets reflecting the uncertainty surrounding the UK’s hopes of having a deal in place come the March 29th 2019. With the low blow dealt by Dominic Raab’s resignation and potential vote of no confidence, Theresa May went on to finish the week in search of new support. With the number of no confidence letters currently in the mid 20’s, May is under pressure to win people over on her draft agreement - even going as far as to tell the nation in an interview of the weekend that “Brexit won’t be any easier without me”. With volatility against the dollar and euro for the week ending at 2.67% and 2.83% respectively, all eyes with be on May this week to see if she can gather the support needed to stabilise the pound.

Currency Pairing 08:00 Today Vs 08:00 Yesterday Four-Week High Four-Week Low % Change
GBP/EUR 1.1274 1.1506 1.1172 2.90%
GBP/USD 1.2868 1.3175 1.2691 3.67%
EUR/USD 1.1414 1.1500 1.1302 1.72%
GBP/AUD 1.7585 1.8459 1.7502 5.18%
GBP/NZD 1.8790 1.9903 1.8657 6.26%
GBP/CAD 1.6939 1.7285 1.6637 3.75%

Today's Market Highlights

After a testing week for Theresa May, the Prime minister faces the crucial task of winning enough support both at home and abroad for her draft Brexit agreement. Her tour will start with addressing the business lobby group the CBI at its annual conference in London. May will look to convince the business leaders that her withdrawal deal has been “agreed in full” with the “the core elements of that deal already in place”. CBI president John Allan is expected to call for MPs to back Mrs May’s deal despite his own public admission of it not being “perfect”. However, with opposition leader Jeremy Corbyn attending the conference alongside May, we could see a change in tone from the business lobby group.

Failing to secure enough support for the deal will continue to hinder the pound's recovery. With the added possibility of a leadership challenge that could see a restart to the negotiations, sterling has suffered at the hands of this uncertainty. Other data of note includes US housing starts, however this is likely to be overshadowed by the CBI conference and continued efforts from PM May to sell her Brexit deal.

Today's Economic Calendar

Time Currency Release Consensus Previous
9:00am EUR Current Account 24.2bn 23.9bn
3:00pm USD NAHB Housing Market Index 67 68