GBP price, Brexit news and analysis:
- The strength of Sterling suggests that a Conservative victory in the December 12 UK General Election is now priced in to GBP/USD and the GBP crosses.
- If so, the Pound could ease back after the results are known, with attention then turning to the Conservatives’ January 31 deadline for the UK Parliament to pass the current exit deal.
GBP firm on prospect of Conservative election victory
Sterling’s strength over the past few days suggests that the FX market is now pricing in a victory by the ruling Conservatives in the UK General Election on December 12 – indicating that GBP/USD and the Pound crosses could ease back after the election is over.
The latest opinion polls suggest a lead of between 7% and 10% for UK Prime Minister Boris Johnson’s party, indicating that GBP/USD could reverse on profit-taking after breaking through resistance at 1.30 this week. However, that level could now provide support and limit any losses.
GBP/USD Price Chart, Hourly Timeframe (November 29 – December 5, 2019)
Chart by IG (You can click on it for a larger image)
Brexit Glossary - Brexit Jargon and Terms Explained
If the Conservatives were to win, attention will likely turn then to Johnson’s January 31 deadline for the UK Parliament to pass the deal agreed by him with the EU. However, even if it passes that will not end the Brexit debate. Two more dates will then be the focus of attention: the July 1 deadline for extending UK-EU trade talks and December 31 for a UK-EU trade deal.
If the opposition Labour Party should win, defying the opinion polls, Sterling would likely drop further. Then the key dates to watch would be March, by which time Labour leader Jeremy Corbyn has said that a new deal will be in place, and June, when he has promised a referendum on the new deal.
The most uncertain outcome would be a hung Parliament, with no party winning an overall majority.
Brexit Timeline – The Path Ahead
We look at Sterling regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts
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--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex
