Sterling exchange rates fell below 1.12 against the single currency this morning, its lowest level since September. Losses were also seen against the US dollar, with cable falling to 1.27 an eighteen month low.
What has caused sterling to fall?
The pound has come under pressure ahead of a parliamentary vote being held today where MP’s will vote on whether the UK government broke Parliament’s rules by failing to publish the legal advice it has received on its Brexit plan. Opposition parties have said Prime Minister Theresa May’s government have ignored a binding commons vote and have demanded release of the full advice. In response No 10 have insisted that the confidential advise is not in the national interest.
Once again the tit for tat Brexit shambles is creating a significant sell off for the pound. Sterling has no fallen over 3% against the Euro, nearly 4% against the US dollar, and 5% against currencies such as the Australian Dollar. These are some substantial falls with the real prospect of more to come.
What could impact the pound in the coming week?
Of course Brexit will continue to dominate the pounds movements in the coming weeks with the 11th December the main date of note for anyone that has a short term interest in the pound. This being when Mrs May’s Brexit bill will go through parliament. Rumours are already suggesting there is little to no chance of the vote passing and this will then leave the real chance of a no deal Brexit, a scenario that is set to devalue sterling significantly. As mentioned in my post last week I for one believe, that should the vote not pass, then an alternative to a no deal will be found.
Brexit aside other data to focus on this week is details below:
Tuesday – Bank of England Governor Mark Carney is due to speak this morning followed by UK PMI construction at 09:30
Wednesday – Australian GDP data overnight followed by a speech from European Central Bank governor Maria Draghi. Also look out for European data in the form of Markit PMI and retail sales.
Thursday – no UK data of note but plenty of US data with ADP employment change and initial jobless claims followed by a number of speeches from key Federal Reserve members.
Friday – today is a busy day across the board. We have some UK house price data and Euro Zone GDP data. The afternoon will be doiminated by the key US jobs data in the form of non-farm payrolls.
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