British Pound sinks on PM May’s comments in Sunday’s interview
January 09, 2017 – Theresa May, the Prime Minister of United Kingdom, hinted of a Hard-Brexit in a television interview on Sunday or at least this is what most analysts think her comments were suggesting. GBP is currently trading under pressure against all currencies; it is down almost one percent against US Dollar and Euro. The market sentiment is bullish towards US Dollar as last Friday’s economic data showed strengthening and positive growth in US labor market. Even though the Non-Farm Payrolls were less than expected, the combined data showed a bullish picture for the US economy. Experts were predicting NFP above 175K; the actual figure was 156K. One of the most encouraging figures was the increase in US average hourly income.
“Current bullish sentiment in US Dollar is going to continue as Trump officially takes the Whitehouse and becomes the new President of United States of America. Everything is working great for USD and growth in US economy is going to keep getting better [unless off course something big and bad happens;] hence, USD will remain strong in the following few weeks,” said Greg Thomson, managing director of AGOR, a finance management firm.
PM May said something about prioritizing the immigration problem over making efforts to keep UK in European Union’s single market. Traders as well as analysts saw this as signs of Hard-Brexit. UK is yet to start negotiations with EU member countries over new trade deals and the process of UK’s exit from EU by triggering article 50 is also not initiated. In the Sunday’s interview, PM May said that the government’s Brexit Plan does not involve keeping bits of EU membership. May also stated that her government will push for a full control over its immigration policies. Countries in EU have already made it clear that UK cannot put certain restrictions on its immigration policies if UK wants to remain in a single trading market. Forex Gurus are interrupting these statements as PM May saying that UK is not interested in remaining in a single trading market with the EU.
People started accusing PM May for sending GBP down, and today, she has responded to these allegations by saying that media has misinterpreted her comments. She further added that she has not said anything new in her Sunday’s interview. She wants to negotiate the best possible trading deals with EU within a single EU market. She didn’t confirm that she and her government is aiming for keeping UK in a single market, but analysts are now saying that these latest comments are suggesting that. If May confirms this, then GBP is poised for a major recovery.