12th February 2019 – Sterling guidance from Bank of Ireland Markets & Treasury
EUR/GBP is currently trading at 0.8750 having already eclipsed the entire 2018 trading range in the first month of this year. The 5% rally in Sterling since December has reflected the market view that a No Deal scenario was overpriced by markets with EUR/GBP above 90p. Our base case remains and that is that we avoid a No Deal scenario on March 29th.
Analysing our probability-based estimates of the different Brexit scenarios, if we were to get the current deal – or something close to it – passed through the UK parliament, then we would expect to see a move towards the low 80’s in EUR/GBP. On the other hand a No Deal scenario will likely push EUR/GBP above the all-time high of 98p so currently the market is trading just below the middle of those estimates. Most market participants have a low probability for a No Deal scenario playing out and therefore we believe the risks for Sterling are not asymmetric at this stage. With a low probability assigned to a No Deal outcome, were this to occur then the move lower in Sterling would be far greater than the rally on a ‘soft-Brexit’ outcome.
The risks for Sterling are very much two-sided and although our base case is to avoid a No Deal scenario, we’re not complacent about the risks. Our message to businesses has been consistent, take the currency risk out of your business.
11th February 2019 – Brexit concerns see high rate of savers in border areas according to the latest Bank of Ireland/ESRI Investment Index. Read the article here and download latest index results here
4th February 2019 – Investment Markets Weekly – Keep up to date with the latest investment markets news and how Brexit is affecting them. Read more here
1st February 2019 – Article – Which sectors will be most impacted by Brexit? Read more here
1st February 2019 – Article – How can Bank of Ireland help you fund your preparations for Brexit? Read more here
1st February 2019 – Article – How can you prepare your business for Brexit? Read more here
- December 2018
- November 2018