Shortly after Midday, the British ambassador to the EU, Sir Tim Barrow, is expected to deliver a letter from UK PM Theresa May that will formally begin the UK’s departure from the European Union. XTB has shared a few historic UK Article 50 day trading tips that you need to know.
29 March, XTB – The markets are in wait-and-see mode going into the event, with the Pound showing some slight weakness and the FTSE 100 little changed. On June the 23rd last year, the UK voted to leave the European Union and just over nine months later this decision will become a reality.
Despite a few hiccups, Brexit is to become a reality
There have been a few hiccups along the way regarding the process by which Article 50 can be triggered, but the government has now seemingly met its self-imposed deadline of formally beginning the exit before the end of March. A two-year window will now begin during which the UK and EU will furiously attempt to thrash out the details of the separation before the UK officially leaves the Union.
In terms of how the markets have reacted since that momentous day last June, the pound has dropped to its lowest level in several decades whilst the leading UK stock market has soared to all time highs – in large part due to the depreciation in sterling. The question now is how much of Brexit has already been factored in and where next for these markets.
UK Article 50 day trading tips – What next for GBP?
As far as today’s events go the markets shouldn’t be caught off guard like they were last summer. This move has long been telegraphed by the government and should come as no form of surprise. Theresa May will address MPs in the Commons later, and this could prove the most market moving event of the day for the pound. With the latest positioning data from last Friday showing record levels of shorts in Sterling, there is some suggestion that we could be in store for a relief rally as there is only so many times the same news can be discounted. Currency traders appear a little cautious going into the event but if May’s rhetoric is upbeat and positive – as it was during her January speech – the pound is ripe for a sharp short covering rally.
The end of the beginning or the beginning of the end?
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