After climbing for most of the week against the major currencies the British tumbled by it’s biggest margin in almost a year on Friday after a speech by Theresa May which dramatically incresded the odds that the UK was headed for a hard Brexit.
Mrs May noted on Friday that her government had reached a stalemate ovet the conditions surrounding Brexit and issued a stern warning to the European Union that the UK will stand its ground to get a good deal.
“I will not overturn the result of the referendum, nor will I break up my country, we must and will prepare ourselves for no deal”. Prime Minister May said.
“Anything which fails to respect the referendum or which effectively divides our country in two would be a bad deal and I have always said no deal is better than a bad deal,” she added.
The immediately fell by more than 2c against its US counterpart and the beginning of next week will be crucial in order to stem any further losses.
Some say the strong words form May were staged to pressure the EU into a deal that would ensure a smoother Brexit but the ploy is likely to backfire and as the day’s go buy and a hard Brexit becomes more likely, the Sterling is in for more pain.
“May seems willing to call the EU’s bluff here, sticking to her guns,” said Valentin Marinov, head of Group-of-10 foreign-exchange research at Credit Agricole SA.
“Trading GBP off the Brexit headlines has been plagued by fatigue in recent days, and we may see a bit of revival in the downside GBP hedges.” He added.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this broker. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 61% of retail investor accounts lose money when trading CFDs with this broker. Before deciding to trade foreign exchange you should consider whether you understand how CFDs work, your investment objectives, your level of experience and readiness of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.|