The Pound has surged higher overnight as Theresa May made a midnight statement in Strasbourg. The Prime Minister flew out to have a last minute meeting with Jean Claude Juncker in an attempt to get extra assurances on the ‘backstop agreement’. The PM has managed to get some legal assurances on the Irish Backstop and will be hoping that they are enough to convince enough MP’s to change their mind and vote for her Brexit Deal when they hold a ‘meaningful’ vote in parliament later this evening. The House of commons will be debating through the course of the afternoon and will then vote at around 19:30.
Many comments have been made overnight and into this morning by key players, one of the most important being Jeremy Corbyn who said, “the PM has failed and urged members of parliament to vote against her deal”.
Accordingly this move in the value of the Pound looks exaggerated and may be short lived. The one thing that is certain, is that between now and 19:30 this evening volatility will be high.
The Euro, which is one of the worst performing currencies thus far in 2019 has managed to make a small gain against the Dollar overnight but remains vulnerable to the poor state of the Eurozone economy in the weeks and months ahead. The focus has for a long time been on Brexit, which has given the struggling European economies like Greece and Italy somewhere to hide – but for how much longer?
The US Dollar is marginally weaker against a basket of currencies as flows moved out of the Dollar and into Sterling after Theresa May’s statement in Strasbourg overnight. Risk appetite was higher on hopes of a Brexit deal.
The Day Ahead
The main focus today will be US CPI data due out around midday, the statement to be made by the Attorney General on the Brexit progress and then finally the debate in the house of commons and ‘meaningful vote’ in the house of commons this evening.
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