Fundamental Forecast for GBP: Neutral
Sterling (GBP) Talking Points:
- Brexit continues to dominate market thinking and the surrounding noise is going to ramp up.
- Economic calendar is quiet; BoE governor Carney speaks on Tuesday.
The DailyFX Q4 GBP Forecast[1] is available to download.
It remains extremely risky taking a Sterling position at present as we head towards the Parliamentary vote on December 11. Ahead of this vote there will be a five-day debate in Parliament – December 4, 5, 6, 10 and 11 – where MPs will be able to put forward amendments to the Brexit bill with a maximum of six of these chosen by the Speaker of the House. While these amendments are not binding they are likely to heap pressure on UK PM May ahead of the vote. During next week the ‘noise’ around Brexit will increase further, leaving traders at the whim of rumor and biased commentary. In this situation it is difficult, if not impossible, to make a considered Sterling trade.
As we stand, PM May is very unlikely to get her Brexit bill passed through the House of Commons[2] as large swathes of both Conservative and Labour MPs have already stated that they will vote against it. This leaves the next step unclear with various options available.
Brexit Impact on Sterling: How the Pound Might Move After the Parliamentary Vote. [3]
The economic calendar[4] is quiet next week with the main point of interest BoE governor Mark Carney’s speech at the House of Commons on Tuesday at 09:15 GMT. Governor Carney’s recent Brexit Impact analysis caused a
