Boris' bill faces vote later today
A key element to the Pounds recent fall has been due to the PM's internal market bill, which allows the UK to scrap parts of the already agreed withdrawal agreement. Critics say the bill is breaking international law, whilst advocates say the bill is protecting the UK in a worst case scenario. If the bill is passed, we expect to see more £ weakness.
The Pound suffered its worst trading week since mid-March last week, as chances of a no-deal Brexit increased to 50%. We believe there will be some sort of a deal agreed between the EU & UK, but we remain limited in our view of how high the Pound could realistically go this year. The surge in Covid cases and consequentially tightening of social rules, may lead to some sort of lockdown near-term. If a second wave truly hits, there is no doubt the £ will suffer again. Then there is the real unemployment figure that will come in November (once the furlough scheme ends) and paint a bleak picture.