Prime Minister Theresa May has been holding talks with Labour leader Jeremy Corbyn as the date for UK exiting the European Union without a deal in place fast approaches. The current default position, unless the Prime Minister can organise an alternative arrangement with Brussels, is that the UK will leave in a ’hard Brexit’ scenario at 11pm on Friday, 12 April. Sterling has remained sensitive to Brexit updates and was this morning treading water as political uncertainty continues to keep investors on edge. As of 9:13am UK time, the pound is trading at €1.1628, down 0.2 percent from the open.
Against the US dollar, Sterling is at $1.3053.
Connor Campbell, analyst at Spreadex, said: “Sterling got off to a sanguine start, climbing 0.2 percent against the dollar and euro.
“That’s somewhat surprising given the lack of political progress over the weekend, an impasse that leaves the UK firmly on track to exit the EU without a deal on Friday.”
Michael Brown, senior analyst at Caxton FX, said: “Sterling remains relatively well-supported ahead of another crunch week for Brexit, with focus falling on this Wednesday’s EU summit where leaders are expected to grant the UK a further extension to Article 50, possibly as long as 12 months.
“The granting of an extension may support the pound due to the avoidance of an imminent no-deal exit, however the deadlock in Westminster over the way forward is likely to cap any rallies unless cross-party talks are more fruitful this week.”
There are set to be more talks between the Conservative and Labour today, while the House of Lords will see the continuation of its extension-seeking Cooper bill debate.
The Prime Minister released a video message over the weekend, recorded in her Chequers country retreat, in which she spoke about the “new approach” of cross-party talks with Labour.
She described the discussions with Mr Corbyn as “the choice that lies ahead of us is either leaving the EU with a deal or not leaving at all”.
The negotiations stalled after Labour said the Prime Minister had refused to set out any changes to her Brexit red lines and no further face-to-face meetings have yet been confirmed.
Mrs May said: “It’ll mean compromise on both sides but I believe that delivering Brexit is the most important thing for us.”
The pound was helped up today by disappointing German trade data, with experts interpreting the release as the latest sign of weakness in Europe’s largest economy.
According to The Federal Statistics Office, German exports and imports both fell more than expected in February.
Seasonally adjusted exports were down by 1.3 percent on the month, the biggest drop in 12 months, while imports fell 1.6 percent.
The trade surplus edged up to 18.7 billion euros ($20.99 billion) from a revised €18.6 billion the previous month.