Last night Prime Minister Boris Johnson lost to opposition MPs and Tory rebels, as the House of Commons voted by 328 to 321 to take control of Parliament’s agenda today. This is in a bid to table a bill to extend the UK’s Article 50 Brexit timetable once more.
Mr. Johnson has fired back and stated that he will seek a general election, if this bill materialises. However, Labour leader Jeremy Corbyn has stated that they won’t support a general election until a ‘no deal’ is off the table, and consequently an extension of Article 50 is agreed.
The Prime Minister is furious with the Tory rebels, as he believes the UK will be handing back control of Brexit negotiations to the Europeans, and a Brexit deal will be less likely.
If an extension occurs, I expect the Pound will strengthen, like it has done in previous years when the UK takes a step back from leaving the EU without a deal. However, history also tells us that general elections put pressure on the currency, therefore this is something to watch out for.
Brexit developments are coming thick and fast, and are providing opportunities for clients buying and selling Euros. If you would like further information about how Brexit could impact your currency exchange, feel free to email me directly firstname.lastname@example.org, Dayle Littlejohn.
Euro predictions: ECB may restart QE
In regards to economic data, the key releases to look out for to finish the week are the latest GDP (Gross Domestic Product) numbers for Europe on Friday. Also, US Non-Farm Payroll (NFP) numbers and US unemployment data are released on Friday too.
The European Central Bank (ECB) has hinted at starting another round of Quantitative Easing (QE) sooner rather than later. This involves injecting vast sums of Euros into the Eurozone’s financial system, to stimulate economic growth, yet simultaneously devalues the Euro. If Eurozone growth declines this Friday, this could be the final nail in the coffin to convince the ECB to restart QE. Therefore, the Pound could strengthen against the Euro.
As for the US Non-Farm Payroll numbers, they have the ability to cause mayhem on the markets. Therefore, keep a close eye on the release on Friday, if you are planning to make a transfer at the end of the week.