Finally here. Yes… It has been a loooong wait but UK Prime Minister Theresa May will finally explain this afternoon her position regarding the Brexit negotiation process.
Speculation over a possible hard Brexit announcement has been pressuring the British pound in recent days. Only yesterday, the GBPUSD pair moved to a record low of 1.1985 during Asian hours, shedding 1.5 percent ahead of Theresa May’s speech.
While it remains unclear her position over this controversial issue, we can be sure of one thing: her words will put together a strong volatility tomorrow. Should you take profit and light a cigar or stay plugged to buy in hope of an upward correction. Honestly, it’s hard to say.
TV channels, newspapers, news agencies… so far, most headlines have shown that May is clearly going to announce a “hard” Brexit strategy tomorrow. But again, not so fast, her spokeswoman said on Monday those reports are pure “speculation”.
Just in case you haven’t followed the development of the Brexit case, here are a few key facts that would help you understand what are we talking about and how you can profit from it.
Back on June 23, 2016, Britons voted to leave the European Union by a narrow advantage. The so-called Brexit referendum unleashed a series of rapid changes in the political and economic scene, including a deep plunge of the British pound against other major currencies and the resignation of David Cameron as Prime Minister.
Later on, Theresa May assumed as the new Prime Minister of the United Kingdom with a strong promise to turn Brexit into a reality as soon as possible. While negotiation teams are already working on the divorce, the parliament continues to argue that the decision to start such process (triggering Article 50 of the Lisbon treaty) should be agreed with it first. To resolve (or delay) this issue, the Supreme Court will rule in January whether Theresa May will actually need permission from parliament or not.
Hard vs Soft Brexit
Hard: Simply explained, a hard Brexit deal would mean for the UK to renounce its full access to the single market and the customs union with the European Union. Such agreement permits the UK to implement a harder control over its borders, although it presents serious limitations from an economic standpoint.
Soft: A soft Brexit deal would somehow preserve the good terms between the UK and the European block, meaning trade conditions and “passporting” rights could still be negotiated if the Britons comply with the immigration regulations applied within the European borders.
Now that you know what are we facing tomorrow, just tighten your belt and wait.