Brexit to fade into the background
The GBP's spike on the Conservative majority win was sudden and expected. Traders will now start to look at the challenges ahead with Brexit due to happen by the end of the month. The Withdrawal Agreement Bill shall now finally be passed and the Parliamentary blockage is now finally over.
UK data will now also rise from being unimportant to becoming important once again. We have a great deal of data coming up this week including the Bank of England's (BoE) rate decision. So, we can expect keen focus on the data and the BoE decision now. Time to re-set from pretty much ignoring UK data to looking at it once again. With the BoE expected to stay on hold the issue will be on their forward guidance. If the BoE take a bearish stance and see a rate cut ahead then that, coupled with the time running out on the transition period ending in ~12 months, we will see the GBP under pressure again. The UK is out of the pit, but not out of the woods yet.
