Tag Archives: Brexit currencies

'Wake up call' yet to happen as the clock ticks on.A series of votes in the British parliament resulted in little new progress on the Brexit front; the outcome being that Theresa May will return to Brussels to attempt to improve her ‘deal’, which a new parliamentary vote scheduled for mid-February.However, Brussels has rejected the idea of reopening negotiations and it is not clear that mere tweaks will be enough to overcome the intense opposition in parliament to May’s initial deal.Bottom...

Theresa May reaches out to find all-party agreement on Brexit.This week, the British Parliament rejected Theresa May’s divorce deal en masse. At the same time, she has kept enough support to stay in power, as a motion of no confidence was rejected.How the Brexit process unfolds from now remains highly uncertain. The recent turn of events means there is an increasing probability of the UK seeking an extension of the 29 March deadline (now our base case) as May reaches out to opposition...

Risks of a “no deal” Brexit appear to be receding.Theresa May’s Brexit plan is likely to be defeated in the 11 December (unless postponed) UK parliament vote. The press is currently suggesting a defeat by a margin of around 100 MPs, but if it is higher, then it would seriously handicap the chances of a ‘yes’ in a second vote. A rejection of May’s deal would open the door to several scenarios, including the possibility of a second vote after possible tweaks to the current deal, although...

Uncertainty remains high with outcomes that could have consequences beyond the UK.Having secured formal approval of the divorce deal from EU leaders on 25 November, Prime Minister Theresa May now faces the far bigger challenge of securing UK parliamentary approval by mid-December. Both political and economic uncertainty could remain elevated until the 29 March deadline.The tail risk of a no-deal Brexit on 29 March remains high, although there is still room for alternatives, including an...

Following the Brexit referendum, prolonged GBP weakness is likely, while the Swiss franc faces renewed upward pressure Greater uncertainties, such as those caused by the Brexit vote, generally favour lower risk appetite. As a result, safe-haven currencies like the US dollar and currencies with positive current accounts and/or positive net international investment positions (JPY and CHF) are expected to outperform. Between the Bank of Japan and the Swiss National Bank, the latter would seem...