A no-deal Brexit less than six months before Britain leaves the European Union is hardly an option. Prime Minister’s Brexit strategy is subject to harsh criticism both by friends and foes.
Prime Minister Theresa May “warned” her party that a no-deal Brexit is possible if they do not support her plan. May’s intention is to protect cross-border trade with EU. This, according to the protesters of such plan will create a barrier for major trade reforms and the required independency.
The International Monetary Fund predicted that Brexit will deteriorate the UK economy in any case. However, a no-deal Brexit will hurt UK significantly, according to Christine Lagarde’s statements during her presentation on Britain’s economy.
On the other side, the spokesman of Britain’s Prime Minister stated that May is confident of reaching a Brexit deal with the EU. Nonetheless, he added that Britain’s government is ready “for all scenarios”.
Further, EU’s Brexit negotiator reassures that the negotiation talks have made satisfactory progress focusing on the “spirit of good cooperation”.
Forex Market – No-deal Brexit rhetoric has not weighed yet
The Dollar traded lower 0.25% against its major traded rivals as threats for new tariffs on China products on behalf of the USA kept traders cautious.
The Sterling rose 0.2% close to a 1 ½ month high. The pound traded almost flat against the single currency. Analysts however are concerned as the rhetoric about a no-deal Brexit has not weighed yet.
Oil prices rose following traders’ concerns on supply weighs ahead of US sanctions over Iran. Although the USA, Russia and Saudi Arabia confirmed that they can cover Iran’s share in the oil market the traders are cautious. Brent crude futures were up 50 cents a barrel. U.S. crude futures rose by 50 cents from their last close too.
Gold prices rose sharply as US dollar hit by threats for new tariffs over Chinese products. Value of the US Dollar is a factor that influences the gold’s price in the Forex Market. When the dollar is strong, gold tends to be weaker, thus its price falls and vice versa.
Sources: Reuters, CNN money, BBC
PLEASE NOTE The information above is not investment advice.