Sterling was the clear loser of the week, snapping the rally of the past few weeks and ending down against every major currency and the Zloty on fears of a hard Brexit.
Parliament backed an amendment that sent Theresa May back to the EU for further concessions. EU negotiators state that these are impossible. Consequently, although a delayed Brexit is still the most likely outcome in our view, the chances of no deal have increased marginally. Markets clearly saw it last week, sending the Pound sharply downward, particularly against the Euro. Nissan announcement over the weekend that it's cancelling plans to build SUVs in Britain over Brexit should add to the short term gloom on Sterling.
GBP/PLN (Jan ‘19 - Feb ‘19)
Source: Thomson Reuters Datastream Date: 04/02/19
Author: Enrique Diaz-Alvarez, Chief Risk Officer at Ebury