Sterling dips as potential general election looms large…
The pound dropped against its peers yesterday as the prospect of an end of year general election looks increasingly likely. Yesterday afternoon PM Johnson confirmed that he will be holding a vote on a December general election on Monday. In return to MPs, he has offered more time to scrutinise his Withdrawal Agreement Bill. As a result, the pound pushed towards $1.28 and €1.15 against the US dollar and euro, respectively.
It’s now down to Jeremey Corbyn to approve and, in turn, rally his troops to fight what has been proposed – a December 12th vote. However, there’s one large hurdle in the way of Corbyn agreeing to Johnson’s ploy – a EU approved Brexit extension. At present we’re waiting for the European Union to confirm acceptance and just how long they’re willing to offer. The opposition leader, who is under a lot of pressure to accept Johnson’s challenge, is playing for time while he waits to see what the EU do. The path forward for sterling just got even rockier! $1.28 and €1.15 remain the key levels to watch out for on the downside. Will they be tested again today?
Today’s economic calendar is rather light. Outside of the usual Brexit developments, many will be keeping a close eye on the German IFO reading – this measures business sentiment. Additionally, US consumer sentiment will also be on the agenda in the afternoon session.
Written by Viv Savani. 8:10am, October 25th 2019
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