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The Pound stable in Asia

 ‘Struggling in a vortex’

Global currency markets watching how the UK’s post-election uncertainty pans out will likely focus on what it means for the country’s exit from the European Union [1].

Negotiations with Brussels are due to begin next week, with the outcome expected to have a significant impact on the economies of both the UK and the EU.

Mrs May has been pushing for a so-called hard Brexit – where the UK leaves the EU single market and the customs union – instead of a softer Brexit, where the UK would maintain the benefits of those associations.

“Certainly, prolonged uncertainty would argue for a deeper correction on sterling as May’s diminished Brexit mandate scenario plays out,” said Stephen Innes, senior trader at Oanda.

“However, there are cooler heads in play suspecting the only real option left is the more market-friendly outcome where the UK adopts a European Economic Area styled agreement. So, expect markets to struggle in the vortex of near-term possibilities clashing with longer term probabilities.”

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes [6]

Head of Trading APAC at OANDA [7]
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes