"For GBP bulls the fact that May remains in office is also reassuring because it means that she has not given way to a Brexiteer such as Gove or Johnson," note Rabobank analysts.
Key quotes
"May is considered less likely to allow the country to edge towards a hard Brexit. Investors have been taking comfort from the fact that there appears to be no real will for a hard Brexit. That said, May’s options are still painfully limited. She may be able to raise cross party support for a plan that would keep the UK within the customs unions, since the Labour party have already endorsed this plan."
"This would solve the Northern Ireland border issue. However, hard-line Brexiteers in her own party see the ability to make independent trade deals as the jewel in the Brexit crown. Since this would be impossible if membership of the customs union was maintained, pursuing this route would risk splitting the Conservative party in two. Indeed, press reports already suggest that May has promised Brexiteers that she will not agree to keep the UK within the customs union."
"Regarding the prospect of a second referendum, the fact that opinion polls have been indicting a widening bias in favour of ‘Remain’ has also been lending support to the pound. A YouGov poll conducted on January 16 suggested that the ‘Remain’ camp would win by a 12 ppt margin - the widest since the June 2016 referendum. That said it is unclear whether or not there would be parliamentary support for this option. Neither May or Corbyn are in favour and MPs whose constituents favoured ‘Leave’ in the 2016 referendum may not back another vote. Press reports have suggested that Corbyn could face resignations of up to a dozen front benchers if the party were to back a second referendum."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.