Pound to Peso Exchange Rate Worsened by UK Brexit Talks, Fears of Scottish Devolution
The Pound has been soft against the Mexican Peso during Monday’s trading, having slumped by -1.5% in the pairing at a time of low confidence in the UK economy.
As well as a lack of data leaving investors to focus on negative political developments, the situation hasn’t been helped by an apparent failure to resolve the Scottish respect issue.
Prime Minister Theresa May has met with her counterparts in the devolved nations and discussed issues stemming from Brexit, but doesn’t appear to have address Scotland’s desires to remain in the EU single market while leaving the EU as part of Brexit.
Commenting on the situation afterwards, Scottish First Minister Nicola Sturgeon said;
‘There has been no willingness to meet in the middle on the part of the UK government. In terms of me getting a sense of whether Scotland is going to be listened to at all, that period between now and triggering of Article 50 is absolutely crucial’.
The Article will remain in focus on Tuesday, as MPs in the House of Commons are due to start debating the bill for Article 50, which must be passed before the Government can officially start the UK on the path to leave the EU.
If MPs object to or attempt to amend the bill before passing it, the Pound might appreciate, as it could go some way to thwarting the efforts of the Government to implement ‘Hard Brexit’.
Mexican Peso Demand Climbs as Trump Immigration Ban Further Weakens US Dollar Demand
Although the Mexican Peso slumped against the Pound when Donald Trump was elected President in November 2016, the Peso has since begun to appreciate visibly against Sterling ever since Trump started actually acting as President on January 20th.
Trump has proposed a vast border wall with Mexico, but issues over how this would be paid for have left the audacious project to fall by the wayside.
This, along with more recent measures to ban immigration from a number of Middle Eastern countries, has severely damaged the US Dollar, raising Mexican Peso demand by contrast.
The Peso is expected to appreciate further in the future if Trump remains as caustic a President as he was last week.
Closer to home, domestic data this week will include Q4 GDP growth rate figures on Tuesday and business confidence stats on Wednesday. In all previous cases, rises were recorded for the results.