Pound steady despite reports of fourth Brexit vote

Philip McHugh April 24th 2019 - 2 minute read

The pound made some tentative gains on Tuesday but ultimately was unable to hold its ground after reports emerged that a fourth vote on Theresa May’s Brexit deal could take place next week.

Sterling appears to be holding steady this morning meanwhile, with GBP/EUR flat at €1.1529, GBP/USD muted at $1.2927 and GBP/CAD stable at C$1.7394, while GBP/AUD and GBP/NZD both strike higher, surging to AU$1.8370 and NZ$1.9518 respectively.

Barring any major Brexit developments, we may see the UK’s latest borrowing figures in the spotlight today, potentially lifting the pound if they print in line with expectations.

What’s been happening?

Following a soft start to the weak for Sterling as the closure of UK markets for the Easter weekend resulted in thin trade, the pound found its feet again yesterday.

This came as Parliament returned from the Easter break, allowing cross-party Brexit talks to resume in earnest.

However Sterling sentiment appeared to weaken again in the afternoon, with the pound paring some of its gains following reports that Theresa May could seek to hold a fourth vote on her Brexit deal next week amidst growing pressure from within her party to resign.

This allowed the GBP/EUR exchange rate to recoup all the losses from Monday, with the euro unable to stem its losses after Eurozone consumer confidence slumped to a three-month low in April due to rising concerns over slowing economic activity in the bloc.

Meanwhile, the GBP/USD exchange rate fell back to a two-month low on Tuesday, with investors flocking to the safe-haven US dollar as a cautious mood fell over markets, with some stronger-than-expected US housing data lending further support to USD throughout the second half of the session.

What’s coming up?

Looking ahead, we may see the pound enjoy some modest gains this morning as the UK publishes its public sector borrowing figures, with economists forecasting that the UK will have experienced its third consecutive monthly budget surplus in March.

Meanwhile, EUR investors are likely to be focused on Germany’s latest business climate index, with the euro likely to stumble if the outlook of German firms remained broadly pessimistic in April.

Finally, the absence of any notable US data economic data could limit the appeal of the US dollar today.

Written by
Philip McHugh

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