The Pound continues to post gains against the likes of the Euro and US Dollar following Theresa May’s Brexit clarity last week. The Supreme Court decision released yesterday ruled that Parliament must act to invoke Article 50 before the UK begins its exit from the EU.
This has helped to create a safety net for Sterling investors and prevents Government alone dictating the Brexit terms. Given that most members of Parliament have little intention to block the vote in June, it’s unlikely that the outcome of yesterday’s decision will have any impact on the Brexit deadline, so why is the Pound gaining momentum?
12 Countries to negotiate trade deals with the UK
Countries including Australia, New Zealand and Japan are amongst some of the countries gearing up for a trade deal with the UK, and although the prospect of a Trump Presidency could rattle markets, a promise of a swift trade deal with the UK may help the UK’s position once it formally leaves the EU.
Theresa May’s promise of a global Britain may pay off, but it remains important that the UK maintain close ties with the rest of Europe given that it exports nearly 50% of its goods and services to the single market.
May announces Brexit white papers
During questions time Theresa May responded to Tory MP Chris Philp by suggesting a white paper will be revealed, which some reports have suggested could be released as early as today. The paper is expected to summarise the Government’s Brexit plans ahead of Article 50 deadlines. There are a growing number of MP’s willing to prevent Article 50 from being invoke, notably lib Dem Leader Tim Farron. Labour are also on standby to scrutinise the Government’s position which could make for complicated negotiations. As we approach the expected deadline for Article 50 the Pound may begin to reverse from its recent highs as the dust begins to settle and the countdown to Brexit begins.
UK GDP figures impress
Following this morning’s strong GDP figures, the Pound continues its upbeat trend against the Euro and US Dollar. 7 months on from the vote and the UK economy is showing little signs of contraction which has put further confidence in GBP investors.
The question now is how long can the Pound rally continue? There remains opportunities in the very short term for Pound Sterling to make gains against its major counterparts, but with the invocation of Article 50 now just weeks away these gains could take a sharp u-turn at any moment.