If you’d like to know will the Euro rise, it may interest you to know that, on Wednesday 27th, all 8 indicative votes failed to pass in Parliament. This opens up the potential outcomes for Brexit somewhat.
It appears we are stuck in deadlock, with the clock still ticking. Parliament is adamant it does not want to leave without a deal, which was decided by a majority vote of 240. So another solution is required, other than crashing out in two weeks’ time.
Commons Speaker John Bercow recently reverted to a law made over 400 years ago that prevents repeat motions coming back to be debated in Parliament. John Bercow stated that there needs to be a “substantial change” in the current Brexit deal before it can be debated again. We still do not know if Theresa May will be able to get these changes, to bring the third meaningful vote back to Parliament tomorrow.
The current deal would mean the UK would be out of the Single Market and the Customs Union. Remaining in the Customs Union was the only vote last night which came close to an agreement and lost by only 8 votes. If we were to remain in the Customs Union this would ensure a softer Brexit. However, this would limit our ability to negotiate trade deals with other nations.
What is driving change in EUR/GBP rates?
Exchange rates are predominantly driven by Brexit rather than economic data at present, so the direction of the Pound is likely to be determined by tomorrow’s outcome.
German Consumer Price Index (CPI) data was released this afternoon and came in less than expected. The results were 0.4% MoM and 1.3% YoY, compared to expectations of 0.6% and 1.5% respectively. However, given the current times, this seemed to go unnoticed by the markets and focus remained on Brexit.
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