With PM May on the way out and most likely Boris on the way in, a number of analysts have begun to forecast more pain for Sterling exchange rates. We'll know who the new PM will be by the end of July but speculation and comments from those lined up to replace May will be closely watched for signs that they'll push for a Hard or soft Brexit.
The GBP/EUR rate spiked higher towards €1.1750's late Friday on rumours an agreement could be reached between May & Corbyn but as with most rumours, unless they are substantiated then exchange rates tend to fall back which is what we've seen since Friday.
“Brexit Is Back, And It's Already Being Described as The Most Disappointing Season Yet” Talks between Labour and Conservative officials are set to resume today after members of Parliament return to London from their Easter break. If a deal can’t be sealed before European Parliament elections are due to be held May 23, the prime minister’s allies fear she will lose her chance and could be forced out, according to the people, who asked not to be named.
The week ahead offers few opportunities for BoE speakers to discuss how they view the development. Otherwise, with regards to broader themes for financial markets, worries persist around the strength of global growth and its effect on monetary policy. The IMF, earlier this week, cut its estimates for world GDP growth, reflecting slowdowns in China and the Euro zone, and elevated trade tensions. On that front, though US/China negotiations continue to yield positive soundbites, President Trump’s remarks on unfair European trade practices have generated some fresh concern. Trade data for both countries next week could trigger further comments.