Fundamental Forecast for GBP: Neutral
Sterling (GBP) Talking Points:
- UK PM may still face a leadership challenge.
- Sterling roiled by a constant flow of Brexit bad news.
The DailyFX Q4GBP Forecast[1] is available to download.
With the current fractured political backdrop within the UK, taking a position in Sterling has become a very risky trade as technical and fundamental analysis can be rendered null and void in seconds by commentary or unofficial announcements from a wide range of media sources and platforms. While Sterling volatility had been widely expected to rise as the Brexit clock ticked down, the current state of the UK political backdrop makes arguing for a position on GBP[2] nigh on impossible.
The current state of play sees UK PM May possibly facing a vote of no confidence[3] next week, while the draft agreement in its present form is said to be unlikely to be passed by the UK Parliament. This would leave negotiations in a stalemate ahead of calls for either a second referendum or a general election. The EU’s current negotiating position is that they have done all that they possibly can while respecting their red lines, although they may make some, small, concessions if they believe that they can get a deal done. Again, nothing is counted out or can be taken for granted.
Brexit Effect on Pound and UK Stocks: Impact of Deal or No Deal.[4]
Latest Brexit stories:
Brexit News: Sterling Remains at Risk of UK Government Breakup.[5]
Brexit Latest: Sterling Slumps as Brexit Minister Resigns, PM Leadership in Doubt.[6]
On
