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Sterling and Equities unmoved by Brexit extension vote

Following the vote to extend the Brexit process the British pound has not shown significant movement around equity market opening time, currently trading at above 1.32 vs the USD.

We believe that the three votes that occurred during the week went in the expected direction and thus this has been priced in and in our view, the market is still not expecting a Hard Brexit.

If the EU 27 does not accept the request of extension, there could be negative risk to the value of the British pound.

The FTSE 100 has hinted at a positive direction this morning, although it also hadn’t been significantly negatively impacted during the week. We do remind investors that significant weakness in the British pound has been quite positive for multinational companies within the UK and this could continue to be a factor in the event of currency weakness.

Christopher Gannatti , March 2019

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