We had a great end to last week following reports that Brexit negotiations are going well and both the UK and EU see a route forward for a deal to be done by October 31st.
Through Thursday and Friday we have seen Sterling rise by around 4% against the Euro and Dollar, in fact, Friday was the best day for Sterling in over 10 years!
Moving on to this week- traders will be eyeing another leg up for Sterling depending on how events pan out over the week.
The first noteworthy event is the Queens Speech on Monday, which will set out Boris Johnson’s plans for the UK moving forward, considering there was such a jump in prices on Friday, it wouldn’t be unheard of to see some retracement on Monday.
Moving further into the week, the EU Council summit will be running from Thursday until Friday and this is where we will know if it is possible that a deal can be made between the UK and EU. If this is positive, I expect Sterling to rally similarly to what we saw last week, however if it is bad news, then we can expect a pretty steep drop in the Pound.
If this goes well then Parliament are due to be in session on Saturday to either vote through or vote down the deal presented, or to opt to extend the deadline or leave without a deal. This will probably be the most telling day this week, that’s if a deal is agreed between the UK and EU. Again, if this goes well, then we could see Sterling rally on the following Monday if a deal is voted through by Parliament.
This week has the potential to be explosive for Sterling, however, I urge you to be vigilant and remain aware that circumstances can change very quickly with politics, as we have seen time and time again- so please ensure you are using financial tools such as stop losses and market orders to mitigate your exposure to the market and protect you if there are sharp moves on the rates.