Sterling has risen ahead of parliament reconvening this week and debate Prime Minister Theresa May’s Brexit withdrawal agreement.
Traders expect the next two weeks to be highly volatile for sterling. A vote on May’s Brexit deal – which she has said MPs must back if Britain is to avoid a disorderly Brexit in March – will be held on Jan. 15 following the parliamentary debate.
Mixed signs on the momentum in Britain’s economy continue to be overshadowed by investors’ angst about the sort of Brexit Britain is headed for.
While a majority of British lawmakers want to avoid a disorderly crash out of the bloc, a majority are also opposed to May’s deal. The prime minister postponed an earlier planned vote because she faced losing heavily.
We are hearing that the UK may try to delay the actual date of when Britain leaves the EU.
The USD is struggling at the moment, dollar weakness this week has mainly been due to the fact that there is a chance that the Fed will not raise interest rates at all this year.
The main reasons being a slowing global growth, especially in the UK and China. The Fed Chairman Powell has already talked down rate hike this year, with some analysts even speaking about a rate cut.