Good morning,

I can only hope that everyone heeded my warning before the weekend political television shows, as once again, the Andrew Marr show offered a platform for cabinet minister, Amber Rudd, to resign and give her reasoning for doing so. She noted how “80-90% government time (is being) spent on no-deal Brexit” and how there was not “sufficient concentration and planning by the government on getting a Brexit deal”.

This did not sit well with sterling upon open in the Asian session, which opened at 9 pm GMT on Sunday, as traders began to take profit on the pound’s reverse of fortunes in the short term – which I also mentioned last Friday. As it stands, the sell will likely continue into the UK session today, which at the time of writing, has already seen the pound go sub 1.11 on the euro and below 1.2250 on the dollar, the simple reasoning being – there is still too much uncertainty in play.

Essentially, this uncertainty can be characterised into two overlapping camps concerning outcomes on Brexit and Parliamentary numbers.

Uncertainty on Brexit is nothing new but, as seen last week, when clarity is provided by way of the bill currently passing through the Commons aimed at preventing no-deal on the 31st, the pound can and will react. The uncertainty surrounding parliamentary numbers, is something that is significantly murkier, especially when considering how off the mark pollsters have been in recent years.

The general election guessing game could start as early as today, as the government seeks once again to push through a motion demanding an early election – if it is anything like last time, it will fail, as the 2/3 majority needed simply is not there. However, if the bill aimed at forcing an extension is also passed into law today, it is more than possible that we could have an election before October 31st.

The market will then have to consider what makeup offers the UK and the pound a better route to recover: a Conservative majority? A Labour majority? A Lib/Lab coalition? A supply and demand arrangement between Con/Brxt? Or perhaps, no overall majority at all? Those listed are merely a handful of potential outcomes – all of which carry their own risks and possibilities that weigh on the pound.

Early this morning, we have a slew of manufacturing and industrial data out for the UK, as well as a GDP number which is a guide on the health of the economy. All are predicted to return negative readings, which, if confirmed, could easily extend the sterling sell-off as the market reacts, once again, on the clarity provided.

With clarity in mind and a brand new week of parliamentary tribulations to endure, now is a good time to get in touch and get an update from your account manager on next steps regarding your transfer. With a swing of just over a cent on the dollar and half a cent on the euro in a few short hours of trading, things are going to get significantly more volatile from here on in.

Give us a ring on 02073269120 to discuss in more detail.

Have a great day,

Author: Joshua Haden-Jones, Senior Private Account Manager