Home Daily Commentaries Roll on Meaningful Vote 3.0

Roll on Meaningful Vote 3.0

Daily Currency Update

So as expected late last night the House of Commons voted against a No deal Brexit under any circumstances although the margin of victory was much closer than this writer had thought.
More importantly as well it was confirmed that just over half of MPs (53%) have some commonsense and realized how dire a No Deal Brexit would be. Off the back of the narrow victory (which confusingly was seen as a defeat for the government) the pound breathed a sigh of relief and due to the late vote pushed through a number of key figures against the USD and hit one year highs against the Euro.
As Parliamentary procedure expect Jacob Rees-Mogg highlighted to the BBC this changed very little and the UK is still set to leave the EU on the 29th of March as this is written in statute and this takes precedent over last night’s motion. Whilst probably correct Theresa May also supported the idea by saying “the legal default in EU and UK law is that the UK will leave without a deal unless something else is agreed”.


So we move onto tonight’s vote which should be the most significant for the pound. If MPs reject the idea of an extension as it risks the UK possibly never leaving the EU then they may want to have another look at Theresa May’s Tuesday night option and we may have another ‘meaningful vote’ as soon as next week. For a long time the playing field was between May’s deal vs. a No Deal but now that this has been ruled out it looks like it could be May’s deal vs. No Brexit. The paradigm has shifted.

Key Movers

Compared to the drama of Westminster the story of the US Dollar may appear slightly dull. This is mostly true, the S&P 500 is up for its third day in a row whilst the dollar was broadly down against most of its major crosses.


Donald Trump did announce that there is a good chance of a deal with China but that is doesn’t matter whether it happens before or after his summit with Xi. Clearly the President isn’t in a rush to get this over the line.


Today, aside from the usual weekly jobless claims numbers, we also have January homes sales and February’s import and export numbers, something that will catch the attention of President Trump.


The Euro has managed to draw a breath against the USD and recover most of its losses seen last week due to the ECB where EUR/USD dropped to below 1.12. If you were looking to take advantage of 21 month lows on the opportunity may have been missed.




Today see’s the release of final inflation numbers for France and Germany which aren’t expected to waver too far from the flash estimates. On Friday we have the figures for the whole of the euro area but the weak numbers still linger for the ECB with core inflation down below 1%.


Overnight industrial production figures out of China came in showing output growth sinking to a 17 year low as the slowdown in China rolled into the New Year. This follows the disappointing GDP figures seen recently when growth also sunk to 30 year lows. Whilst the Aussie is on the back foot against the pound due to Brexit updates it is also down against the USD.


The Canadian dollar shrugged off its disappointing home price figures yesterday and instead focused on oil inventory numbers out of the US which pushed Crude oil prices above $58 per barrel. House prices fell 0.4% in January and for a fifth month in a row but the Loonie managed to test 1.33 against the US Dollar.


The Kiwi followed its Aussie neighbour overnight performing meekly as Chinese data continued to disappoint investors. Next week’s Q4 GDP figures couldn’t come soon enough for the New Zealand dollar especially in fallow weeks like this.

Expected Ranges

  • GBP/USD: 1.2870 - 1.3260 ▲
  • GBP/EUR: 1.1520 - 1.1775 ▲
  • GBP/AUD: 1.8750 - 1.8860 ▲
  • GBP/CAD: 1.7420 - 1.7750 ▲
  • GBP/NZD: 1.9350 - 1.9480 ▲