With the on going volatility surrounding Brexit, and following my colleague Alastair’s comprehensive outline for the pound in his post yesterday, I thought it would be useful to outline some of the key dates to focus on for the rest of this year and the first half of 2019.
For some the talk surrounding Brexit is becoming rather tedious, however, from a currency point of view it cannot be avoided. With many analysts suggesting a 10% loss for the pound should a ‘no deal’ be seen it is important to know the key dates for your diary should you have a short to medium term currency transfer to arrange.
Key Dates: 2018
- 20 September – EU leaders are expected to discuss Brexit, although a full summit has been ruled out
- 17-18 October – EU summit. This has been seen as a deadline for an agreement setting out the terms of UK-EU “divorce” – the so-called withdrawal agreement – to allow enough time for the UK Parliament and the European Parliament to ratify it. A political declaration on the future relationship between the UK and the EU is also expected at this point
- November – The EU has suggested this month is the latest a deal could be finalised. There is speculation that an emergency EU summit on Brexit might be held in this month, if a withdrawal agreement and a declaration on the future relationship are not reached in October
If a deal has been agreed, MPs will be asked to approve it
- 13-14 December – EU summit. If a deal has not been done by October, this is the fallback option if the two sides still want to reach an agreement
Ratification of the withdrawal agreement by the UK Parliament and the European Parliament.
- 21 January – If the government has not presented its withdrawal agreement by this date, powers for MPs to influence ministers’ next steps will kick in
- 21-22 March – The final summit that the UK is expected to attend as a member of the EU
- Before 29 March – Parliament will have to pass the European Union (Withdrawal Agreement) Bill to implement the withdrawal agreement, assuming it was approved by Parliament beforehand
- 29 March, at 2300 GMT – The UK leaves the EU. A special summit of the 27 other EU countries soon after the UK’s exit is expected, but has not yet been scheduled
- 23-26 May Elections for the European Parliament in 27 EU countries (the UK will no longer be represented in the parliament)
Source BBC website
What are the potential implications for the pound?
For me the next key date will be October 17-18th as this is when the deadline has been for the ‘Brexit divorce’. At this point we will see if an agreement has been made, or we of a ‘no deal’. A no deal scenario could see a some prolonged heavy losses for the pound, although some are also saying that ‘no deal’ is better than a ‘poor deal’. In some ways the UK are stuck between a rock and a hard place and whatever deal is struck could have the potential to cause the pound to fall sharply.
Until this agreement has been made I think the pound will struggle to find any positive movement. We have been range bound between 1.10-1.12 in recent weeks but I feel a prolonged break below 1.10 and we could see a fall to 1.08 and below. For this reason, should you need to buy euros, you may need to prepare for furthers sterling losses.
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