Sterling edges up but acute anxiety remains over Brexit
Both the pound and the euro ticked higher on Monday after EU heads on Sunday acknowledged through the terms of the UK’s departure from the bloc - but analysts are now fixated on whether the proposals will pass Britain’s parliament.
The pound was lingering above the $1.28 mark and picked up as much as 0.3 percent early in trading last week, before closing 0.5 percent lower against the dollar on Friday.
Meanwhile, the Euro was still exhaling a gasp of respite on picking up by up to 0.25 percent on last week’s downbeat close following new data which revealed German and French manufacturing executives were the least buoyant in years about movement in the sector. Yet the fortunate result of the summit on Sunday does not mean much for the risks Brexit entails for sterling.
With markets now predicted to be concentrating their scrutiny on the next stage of ratification in UK parliament ahead of the next decisive summit, in mid-December.
Where a repudiation of the deal by an extensive margin increases the prospect of a no-deal Brexit and should see significant pound downside of 5-10 percent cumulatively.
Whilst, on the other hand, a narrow margin should see the withdrawal deal getting ratified and the pound rising towards $1.32-1.33.