The Pound edged up against the US Dollar by 0.2% during early Monday trading. The continuous support found by Sterling, especially over the last two weeks, arises from electoral polls consistently pointing at a comfortable win for Prime Minister Boris Johnson’s Conservative Party. Should these predictions materialise, the British Parliament will approve the withdrawal agreement from the EU and the uncertainty of the last three and a half years will finally be replaced by a clearer direction for the British economy. This is of course good news for markets and explains the current appetite for the pound.
However, even if a negotiated Brexit were to happen on the 31st January 2020, a new process will start with the negotiation of a trade deal between the EU and the UK. For this reason, even if the Conservative Party does achieve a majority in the next parliament, any future gains for the Pound will be capped.
Photo by Frederick Tubiermont.
