If the French President Macron's demands for French fishing are not met, the threat of dragging Britain into a vast customs union would only galvanize the opposition to Theresa May's Brexit agreement. Image (C) European Union.
– EU leaders sign Brexit agreement
– Macron said May made it harder to do business.
– Pound to Euro ratio 1.1296, Pound-to-Dollar rate @ 1.2819
Pound Sterling rose sharply at the beginning of the new week. The markets exaggerated the weekend news that the EU signed on the Brexit deal reached after months of negotiations by UK and European Commission negotiators.
However, as can be predicted, the gains are ultimately faded into the main challenges facing unchanged UK money: the agreement is unlikely to pass through the UK parliament as it is now, and so the months of uncertainties still remain.
There is little chance of a sustainable recovery until clarity arises.
"The GBP pressure should continue and volatility will continue this week," says Joseph Capurso, Australian Commonwealth Bank. "The next major obstacle is a provisionally scheduled vote for the Brexit agreement approved by the House of Commons of the United Kingdom until 10 December. However, British Prime Minister Theresa May is expected to fight for a majority to cross the Brexit agreement The House of Commons in England. "
To make the deal and sell even more difficult, if France does not accept French demands to maintain access to the waters of the United Kingdom – extremely unusual – in a permanent customs union he said he would use the threat of retention. .
Following the EU leaders' meeting in Brussels, Macron said, "We have a clear position as 27" about fair competition, fish and regulatory autonomy for the EU, and this is our position on future relationship negotiations. " Said.
Without sufficient progress in trade, he implied that a background plan for avoiding a strong border in Ireland, including the temporary customs union in the whole, should be implemented in Ireland.
"This is a lever, because it is our common interest to have this future relationship. I cannot imagine that the desire of Theresa May or her supporters is to stay in the long term within a customs union, but to define (instead). Macron, a suitable future to solve this problem relationship.
This shows us that individual states can use the veto threat to extract individual privileges from the United Kingdom.
Spain has put the UK in a weak position in the second round of negotiations, with the greater control over Gibraltar and the threat of veto by Britain.
Of course, if the Brexit agreement goes through the United Kingdom parliament.
There are reasons to believe that the agreement will not go through comments that Macron will only galvanize the opposition to the plan.
However, the prime minister tried to underestimate Macron's remarks at the time the parliament sold the "best possible deal".
. This is not going to happen, ”he told Macron at a speech to the House of Commons on the afternoon of November 26th, Macron said.
Moreover, hopes for leaning on parliament can vote on the May agreement for avoiding a dı hard n Brexit, as well as hoping that a ın third way m to the United Kingdom will emerge in the European Union. It appears.
However, the remaining in the EU & # 39; People's vote & # 39; The route called. is very difficult at this intersection, and the extension of Article 50 çekilme which seems to be the most effective way of putting the withdrawal process on ice. probable
3% Earnings or 3% Down
The CBA says that the assumptions of the work are still to be passed (or voted) when the House of Commons still exceeds the Brexit bill on December 10th.
If the House of Commons exceeds the Brexit bill, we expect the GBP to hold a limited rally from 1% to 3%.
So But if the House of Commons does not exceed the Brexit bill, we expect the GBP to fall by at least 3%, Av says Capurso.
The Pound-to-Euro exchange rate is currently trading at the 1.1295 level in the interbank market and is at the middle of the long-term range and at levels consistent with the ongoing Brexit uncertainty.
Those who wish to make international payments should note that in the 1.10-1.1090 region, the rates used by the banks are the rates of exchange rates independent of the 1.1180-1.1215 region.
Those who want to pay are advised to talk with independent experts who both gain a competitive rate and learn how to protect a possible negative movement in Sterling in the coming weeks, while at the same time gaining more currencies.
The Pound-to-Dollar exchange rate is traded at 1.2470-1.2563 in the high bank banks in the region and in the interbank market at 1.2822. Independent suppliers offer prices in the 1.27-1.2730 brackets.
The prime minister will now try to sell the deal to the country, claiming that the public only wants to move forward and that the agreement will lead to more uncertainty.
It is difficult to say whether the value of the Pound reflects the belief that the May will succeed, or if it reflects the persistence of several months of uncertainties.
Whatever the case, Sterling has made a very stable trend in the short term despite the headlines, and a few analysts have heard of maintaining the more familar level in the coming days. "We suspect markets are suffering from cuff fatigue suggesting the EURGBP could be limited to the familiar 0.87 / 0.91 range," he says. TD Securities.
"GBPUSD should have been on hold until parliamentary arithmetic became clearer. This would be difficult for Theresa May to achieve. Even if it was a new election, it is still likely to be in the coming months. The political uncertainty in the United Kingdom, Sterling C It assures that a cover will be kept right now, e says the analyst. I Markets.co.