FX traders are preparing for the onslaught of dire warnings about a “no-deal Brexit” by earlier pushing the Pound Sterling close to a 2-week trough. Expected shortly are comments from both the Bank of England and the British government on the lasting impact that the British economy would suffer if they are unable to broker an agreement before the March 28 deadline next year. Though an agreement between EU leadership and the British government was reached this past weekend, the Prime Minister is finding it difficult to get the backing she needs from her party to push the agreement through Parliament.
As at 11:21 am (GTM) in London, the GBP/USD was trading at $1.2784, up 0.37% and moving off the earlier low of $1.2733. The EUR/GBP is trading at 0.8827 Pence, down 0.44%; the pair has ranged from 0.88253 Pence and 0.88714 Pence.
Analysts Suggest Caution Till Vote
What traders are expecting to see is the estimation of just how bad a no-deal would likely be. Media reports say that the government's assessment shows an economic impact of a decline of approximately 7.6% in 15 years as compared to less than 2% under a deal. While analysts are concerned with the report's impact they say that until the actual Parliamentary vote there is no need for traders to panic at this stage of the game.