Afternoon Update – Chequers agreement worth more shredded?

Afternoon all

Leaving the EUR and USD for now as it appears to be chugging along as expected. Data picks up again on Friday so expected to see some volatility particularly in the US.

GBP

GBP has fallen to a 6 week low today before Theresa May was due to meet Conservative Party Lawmakers, the majority of whom want her out of Parliament. However she is seeking to win over lawmakers in her party who oppose her approach to Brexit negotiations. The prospect of a leadership challenge and of the conservative party scuppering an agreement with the EU has weakened the currency in recent days.

A disagreement on a fall back plan for the border between NI and Ireland is a key sticking point with The Times today reporting that a transition phase could be rolled over annually if needed. In our opinion this is just kicking the situation into long grass with a resolution needed sooner rather than later.

More importantly if May was toppled GBP would weaken significantly since her replacement could increase the chances of a no-deal Brexit, however on the flipside we are finding GBP sensitive to good news with the currency increasing in strength significantly.

Feel free to get in contact to discuss further…

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