Halister News

(Bloomberg) -- Expect GBP to resume weakness vs dollar as PM May accepting a parliament vote on Brexit plans is unlikely to result in a detailed plan being revealed or a change in the government’s stance, Nomura analyst Jordan Rochester writes in client note.

• While the U.K. may switch to a softer negotiation stance at some point, it depends on how the government weighs the political and economic costs
  • The U.K. is neither in recession nor showing any signs yet of one to come, so the government is on a firmer economic footing, potentially reducing the weighting to the economic cost matrix of Brexit negotiations and the political one
  • While an intensification of the financial-market stress could hit U.K. hard data, it is too early to expect such a shift in the near term
• NOTE: Expect pound to fall to 1.20 or possibly further vs the dollar, and to breach 0.92 vs euro, Nomura says; other analysts also remain bearish