- The outcome to the Brexit negotiations has always been quite binary with a ‘hard’ Brexit expected to weigh on Sterling and a ‘negotiated deal’ positive for the currency
- The result so far has been a plummeting Sterling, as Boris Johnson promoted his hard stop date for October 31st for a deal or no deal, with Sterling dropping against the Euro from 1.12 in July to 1.07 in August and GBP/USD dropping from 1.2400 to levels below 1.20
- Over the last 10 days as the deal-making has been going on in earnest, Sterling has rallied 6% in GBP/USD from 1.22 to 1.2950 and in GBP/EUR from 1.11 to 1.1650 (5%)
- Despite Sterling’s relief rally, huge obstacles still remain; namely getting the deal through parliament
- Will Boris manage to secure enough votes in the House of Commons? Implied volatility in Sterling still remains at levels not seen since that day in June 2016 when the referendum result shocked the markets
The rollercoaster ride of Sterling continues and if you have currency risk, either existing or potential, that you would like to discuss then please contact the Chatham currency team.