Sterling falls sharply on renewed Brexit uncertainty

The UK Parliament was unable to agree on a single course of action regarding Brexit, except in so far as rejecting for the third time May's withdrawal agreement.

The default now becomes a no-deal Brexit on April 12th, although we still regard this as an unlikely event. Our central scenario continues to be for a longer extension that will give time for the UK to develop a viable political majority around any of the options, perhaps through a general election.

The immediate event is a new round of votes in Parliament over different versions of Brexit, where the goal will be to have at least one that is not soundly rejected. Expect volatility in Sterling until the extension is requested and approved.

GBP/PLN (December ‘18 - March ‘19)

Source: Thomson Reuters Datastream Date: 01/04/19

Author: Enrique Diaz-Alvarez, Chief Risk Officer at Ebury

Keywords Ebury, GBP