Historic Brexit vote defeat sees pound regain days losses

As Prime Minster Theresa May loses Brexit vote by 230 points Chris Beauchamp looks at how to trade GBP/USD and GBP/EUR.

GBP Sterling Pound Source: Bloomberg

The futile gesture has been made, and the result is as expected. The fact that the pound has managed to hold its ground against the euro and the dollar shows what a foregone conclusion this was. It is odd, at this moment of national crisis, to see Parliament locked in stasis and the UK unable to see the way forward. Parliament isn’t giving way, the EU isn’t giving way, and nor, it seems is the Prime Minister.

It still looks as if ‘no deal’ is the least-likely option, and on this basis markets are happy to take a more optimistic view, although anything could still happen. But if the UK is going to exit it all, it now looks to be on the softest possible terms, something that will please investors and may even make UK assets a lot more attractive. But there is a lot of uncertainty to be removed first, and even a delay to Brexit until later in the year does not change this.

EUR/GBP continues to decline, and we should see this recover slightly tomorrow but the overall trend is down, and the drop through 89.50p seems to suggest that the way is clear to move back towards the lows of November, at 86.50p.

EURGBP

EURGBP

Against the dollar, the weighty rebound today puts the pound back on the front foot, and should see $1.30 challenged in due course. But this could be a volatile trip, and we should likely see further opportunities to buy the dip along the way.

USDGBP

USDGBP


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Trading around Brexit

Find out how the UK’s exit from the EU continues to affect traders, and discover:

  • The unique opportunities in a ‘hard’ and ‘soft’ Brexit
  • The markets you should be watching
  • Everything that’s happened so far

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.