As Boris Johnson's Internal Market Bill was voted through parliament yesterday, the pound held firm, closing slightly higher against many of its G10 peers.
Ministers in favour of the bill argue that it contains critical safeguards to protect Northern Ireland and the rest of the UK should negotiations surrounding future trade deals break down. With this said, since the introduction of the notion of the bill, many have opposed it as it clearly violates international law, in turn potentially detrimentally damaging the reputation of the UK.
The bill passed by 340 votes to 263. In another amendment proposed by Labour to reject the government’s bill entirely, the Commons voted 349 to 213, against. Sadly for Johnson, it is not just the opposition who are speaking out against the government’s actions; former Home Secretary Sajid Javid has publicly noted it is not clear to him “why it is necessary for the UK to break international law” and that he is “unable to support” the bill unamended. Javid is not alone in his disdain for the bill, Charles Walker, vice-chair of the Tory backbench 1922 committee has made clear his position against the bill. Quoted in the FT yesterday, Sir Walker’s comments appear to issue a warning to the PM, noting: “If you keep whacking a dog, don’t be surprised when it bites you back.”
As noted previously, the pound managed to sustain itself yesterday. Cable opened the session at 1.2836, and improved marginally, closing off the day at 1.2876.
GBPEUR also closed off the day slightly better than where it opened. The pair started of the week at 1.0826, before closing off Monday at 1.0844.
Despite losing some traction against sterling yesterday, the euro’s performance of late has been impressive, with the single currency notching its fifth consecutive advance against the dollar today. EURUSD opened the session yesterday at 1.0826, and in spite of seeing limited price action, managed to close above the open at 1.1873.
On the data front, at 07:00 we had the UK jobs report. Sentiment was mixed as Unemployment for July rose from 3.9% to 4.1%, yet Claimant Count for August improved from 94.4K to 73.7K. Later today we also have ZEW Index’s from Germany and the Eurozone, followed by Industrial Production from the US.