ANZ Research discusses GBP outlook and adopts a cautious bias in the near-term, expecting volatility to remain high over the coming few weeks.
“Renewed optimism about Brexit has rapidly unwound following several resignations from the UK government, including Brexit Secretary Raab. Parliamentary support for the proposed deal is now in question, with opposition mounting from both the opposition and ruling Tory party. Prime Minister May’s leadership could be threatened and pro-Brexiters are calling for a vote of no-confidence as they believe that the draft withdrawal agreement does not deliver on the referendum result.
The proposed deal will go to the European Council on 25 November, following which it will need to be passed in the UK’s Commons – this seems unlikely. The options are limited to this proposed deal, a ‘no deal’ or an extension of the Article 50 deadline,” ANZ notes.
“It is hard to say where we head from here but we are set for a volatile few weeks,” ANZ argues.