Weekend risks flip to the upside
There was a time when no one wanted to own the pound ahead of the weekend due to the endless Brexit risks. Now the risks are to the upside on reports that Cabinet ministers believe a delay to the March 29 Brexit deadline are increasingly likely.
Theresa May's office denied it but the market senses an impasse and a delay one way or another. That's why the pound is finishing the week with such strength. The thinking is that a deal could come on the weekend and lead to a gap higher before the open on Sunday.
I'd argue that most of today's move in the pound is a result of Brexit hopes but a better question is how much of those hopes will be reversed if there's no news on the weekend and May remains determined to put it to a vote? There's no way of knowing but I'd suspect it's about half.
Cable looks to be breaking above the late-December highs and there is a decided sense of optimism creeping in. That could dissolve in a flash if a political crisis emerges.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.