As the curtain falls on one of the most dramatic opening weeks in Parliament’s history; at the close of trading yesterday, sterling was sitting pretty on two monthly highs against the Euro and Dollar, at 1.1155 and 1.2315 respectively.
Yesterday saw some of the more aggressive pound buying, as not only has Boris Johnson lost control of the legislative agenda, he has also failed to block the bill aimed at preventing no-deal at its second reading as well as failing to force an election to boot.
Coupling this with the news that the House of Lords will not hold the bill any longer than today at 17.00 so it may pass into law, the sentiment around the pound became positively euphoric.
Despite the excitement, the cold hard facts still remain: the no-deal avoidance bill isn’t law, a general election could still put Corbyn in power and businesses still can’t get into gear with the amount of continuing uncertainty to stimulate the economy. These factors will dictate sterling’s more long term health, which is why it is critical to consider making hay whilst the sun shines and taking advantage of the short-term spike in the pound’s fortunes.
At the time of writing this morning, large businesses and traders have already begun to sell the spike, locking in their profits before a slew of data releases today from the EU and USA respectively – you should too.
At 10.00, we have EU GDP and growth data out, which despite being caught in the crossfire of the global US/China trade war, could have the possibility to surprise – especially given the willingness of the German government to spend freely to stimulate their economy.
In the USA, the monthly non-farm payroll jobs figure is due to release at 13.30, which always generates significant volatility in the market – any positive reading could seriously harm the pound’s rebound from yesterday, as traders rush to piggyback on the movements in the market.
As mentioned before, Sunday morning political shows usually have a nasty habit of producing pound damaging comments, as high ranking politicians are put on the spot on a range of Brexit related issues. Contact your account manager before the day is out to discuss the above and taking advantage of this unprecedented move for GBP; before MP’s, the USA and the EU have a chance to knock it down.
Have a great weekend,