It has been a reasonably subdued session in the currency markets, including for Sterling ahead of a parliamentary no-confidence vote in the government due to start at 19.00 London time.
Theresa May’s ruling Conservative Party is expected to survive the vote, with the support of MPs from the northern Irish Democratic Unionist Party (DUP). However, this will not help answer the question of what happens next. Prime Minister has, by law, until Monday to announce the next step in this tortuous Brexit process although parliamentarians are trying to regain control of the agenda. Sterling’s direction remains at the mercy of a divided government and parliament, and volatility – which spiked in the run-up to yesterday’s crucial parliamentary vote on the draft Brexit deal – is likely to remain elevated in coming weeks.
The Euro continues to slide, weighed down by weak Eurozone macro data, and in trade-weighted terms is now at its lowest level since mid-June.
