GBP / USD: Tensions in Northern Ireland and elections in Scotland weigh on pounds

The vaccination-induced increase in the pound in early April lost some of its momentum as tensions rose in Northern Ireland and elections in Scotland became imminent. Brexit was never a unified political moment and intense constitutional questions about Britain’s future are beginning to boil over. Sterling’s medium-term potential for tough domestic politics amid the uncertainty of Brexit raises questions about the ANZ Bank report.

Important quotes

“We expect the issues surrounding Northern Ireland to have a calm head and politicians from all sides will work hard to find a solution to this. There should be a workable solution to border control. It is not in anyone’s interest.” . To escalate tensions or deteriorate UK-EU relations. “

“In Scotland we will have to wait for the outcome of the election on 6 May. Although it is emerging, a referendum on Scottish independence is unlikely in this British Parliament, if only because it will not be for Johnson’s benefit.”

“Both of these issues have the potential to reduce the positive sentiment on the pound and it will be important to see how they play out in the coming weeks. For now, we will consider these risks rather than ‘on the radar’. Believe that Both issues contributed to the GBP’s recent weakness. “

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