Pound Sterling Powers to Fresh Two-Month Highs vs. Euro and Dollar as Markets Sniff a Brexiteer Retreat

Pound Sterling trades towards the top end of a multi-week range against the Dollar and Euro thanks to a combination of positive technical momentum and developments that suggest a 'no deal' Brexit will be avoided on March 29.

Prime Minister Theresa May will today reveal to parliament the shape of the government's "Plan B" Brexit deal with the hope that lawmakers will unite behind the proposed changes, an outcome that would ultimately be welcomed by markets and a British Pound that is craving certainty.

The British Pound is cheap by historical standards and the low probability of a ‘no-deal’ Brexit means the currency is likely to rise in the future, says Morgan Stanley.

The Pound appeared to falter on Friday after official data revealed a steeper-than-expected fall in retail spending during December, although losses have been shallow given the latest developments in the Brexit process, which could now support the currency into the new week. 

Pound Sterling is on the front-foot ahead of the weekend, rising to a fresh two-month high against the Euro and Dollar as Brexit headlines continue to hit the markets in thick and fast with news that the DUP could support a customs union being the most prominent development of the past 24 hours.

Sweden's political parties have agreed the formation and leadership of a new government that will end a four-month period of political uncertainty, enabling markets to return their focus to the Riksbank interest rate outlook and Brexit, which are what matter most for the Pound-to-Krona rate.

The British Pound sits near the top of multi-week highs against a number of major currencies on the assumption a 'no deal' Brexit wil be avoided. However, we hear from a number of analysts that markets could be accused of being too sanguine.

The Pound was trading higher against most rivals Wednesday after an earlier House of Commons vote on Prime Minister Theresa May's Brexit proposals saw the government dealt the largest parliamentary defeat on record, but the outlook for the currency is as uncertain as ever.