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GBP: A wild Brexit ride – AmpGFX

According to Greg Gibbs, Analyst at Amplifying Global FX Capital, there may well be a number of twists and turns for GBP yet as Brexit plays out.

Key Quotes

“The GBP was down on Monday as the passage for a compromise deal through UK parliament looks narrower after a pro-EU member Jo Johnson (not his more famous brother and Brexiteer member Boris) resigned his cabinet post and stated his support for a new referendum.”

“Now both brothers have resigned from the cabinet but from either side of the debate, highlighting the fine-line PM May is trying to walk to appease both sides of the Brexit debate.   That they come from the same family is a metaphor for how Britain is tearing itself apart.”

“But is selling the GBP on a deal failure the right strategy?   Consider what happens next – possible fresh elections and calls for a new referendum, and quickly the market may start to factor in the increased probability of the UK staying in the EU, driving GBP back up.   If you are trading GBP, and increasingly the EUR, you have to remain nimble.”

“The uncertainty is keeping investment managers and big business on the sidelines of the FX market, exacerbating the risk of larger swings in GBP.”

 

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