In the last several days, anyone who has been within a trade with the U.S. dollar and British Pound pair may have been feeling a little on edge, as the spike in the market and complex fundamental announcements have caused quite a turn in the market with a rather huge candle size after United Kingdom cabinet members Esther McVey and Dominic Raab have resigned.
Developments surrounding Brexit, the nickname for Britain’s exit from the European Union, have caused spikes within the market for the Pound (GBP) during the last two years. Waking up Thursday on a two-hour chart, the Pound crashed against the dollar (USD) and all other currency pairs. If you were within a sell in these trades you might have gained your luck. The other side being on a buy might have started their day a little disgruntled.
Theresa May, the Prime Minister of the United Kingdom and leader of the Conservative party since 2016, was hit with a large curve ball when UK Pension Secretary McVey and Brexit Secretary Raab left a five-hour-long cabinet meeting. McVey said upon resignation, “We have gone from no deal is better than a bad deal, to any deal is better than no deal.”
Theresa May’s 12-point Brexit plan:
- Provide certainty about the process of leaving the EU.
- Control the UK’s own laws.
- Strengthen the union between the four nations of the United Kingdom.
- Find a way to maintain the common-travel area with the Republic of Ireland.
- Control the number of people who come to Britain from Europe.
- Guarantee rights of EU citizens living in Britain and the rights of British nationals in other member states, as early as possible.
- Protect workers’ rights set out in European legislation, and build on them.
- Establish a free trade agreement with the European Union.
- Set new trade agreements with other countries.
- Continue collaboration with European partners on innovative science, research and technology initiatives.
- Cooperation with European allies in foreign and defense policy to fight crime and terrorism.
- A phased process of implementation for a smooth and orderly exit with the interests of Britain, the EU institutions and member states in mind.
Court locks in Brexit path
The Supreme Court upheld November’s High Court ruling that it would be unlawful to rely on executive powers to implement the outcome of last year’s referendum. It said a law would have to be passed to authorize Article 50, the official action to leave the EU. It added that the precise form such legislation should take was “entirely a matter” for Parliament.
The influence of this series of events will for the next few weeks continue to result in a very volatile market for the GBP.
Sources: express.co.uk, theguardian.com, oxbridgeapplications.com