- Order Argentex executive Harry Adams tells Euromoney that it won’t be easy for the deal to be approved by the House of Commons
- News of the deal being finalised today, October 15, Monday is “100%, categorically untrue”, according to a BBC source
- Negotiators are reportedly doing their best to resolve “big issues”
As Brexit negotiators try to resolve huge issues ahead of the EU summit happening this week, Order Argentex executive Harry Adams tells reporters that the British pound is likely to fall to parity with the euro by mid-2019 and that it can happen even if an agreement is reached today. The boutique broker Order Argentex is known for its accurate currency forecasts and its prediction has dampened the possibility of the sterling maintaining its current growth.
“While the value of the pound continues to fluctuate in response to EU and UK rhetoric, even if a deal is agreed with the negotiators, we do not believe it will be an easy ride to get it passed through the House of Commons, effectively resulting in no deal”, Adams says.
No announcement today, says source
The possibility of a ‘no deal’ Brexit was forgotten for most of last week as speculations about an agreement made headlines. Just this Saturday, Suddeutsche Zeitung reported that the EU and Mrs May had already reached an agreement, but a BBC source says that the news is “100%, categorically untrue" and no announcement will be made today.
The Northern Ireland question
Michel Barnier of the European Union and the UK’s Dominic Raab are reportedly concentrating on Northern Ireland and its economic relations with the EU. This is an additional problem for Theresa May, according to observers as said talks can delay an agreement further. In a letter addressed to Mrs May, Scots Tory leader Ruth Davidson and Scottish Secretary David Mundell say that Northern Ireland should not be treated any different from the rest of the UK. Talks about Northern Ireland remaining in the customs union is an unacceptable situation when the rest of the country is outside of it. Based on recent reports, British officials want to maintain the “integrity” of the UK while ensuring that a favourable deal is in place before the country’s exit from the European Union. Top ministers are also reportedly getting ready for a cabinet meeting to discuss the deal.
GBP-EUR exchange rate
It is noted by Adams that a “bulge-bracket bank recently presented a no-deal as its risk scenario” noting that the situation will “send sterling down 10%”. Other banking institutions agree, according to Euromoney, but others forecast that the exchange rate will be higher in favour of the pound. Argentex adds that the deal is “much more of a coin toss”.
The firm maintains that the value of the British pound will be the same as that of the euro by the second quarter of 2019. News reports regarding Italy’s proposed budget are also a cause for concern for the euro, analysts say.
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