For those of you who haven't already seen, MPs have voted by a majority of 384 to allow Prime Minister Theresa May to get Brexit negotiations under way. This was widely expected across the board and due to this, the market did not react to the news. In my opinion, I am happy that there is some certainty on the horizon and the government can begin the process of triggering Article 50, which is something that can help stabilise the pound as a currency.
So far this week we have seen the pound start to bounce back slightly, predominantly against the US dollar following President Trump's remarks about the dollar being "too strong", we are currently trading above 1.26 for GBP/USD and above 1.17 for GBP/EUR.
What happens next will determine the direction of the pound, on Thursday we are expecting Theresa May to publish a white paper for her Brexit plans.
This document will detail her 12 point EU strategy that she spoke about in her recent speech, and will be heavily scrutizined by the media and MPs. I am not expecting any surprises from this document, but the government does always enjoy surprising the markets, so I will not rule out something in that document that could potentially cause market movement.
More importantly, the BoE will have it's interest rate decision and release the inflation report at midday on Thursday. We are not expecting any change as far as interest rates and monetary policy are concerned, but due to inflation rising globally due to oil prices it will be interesting to see how the inflation report comes out.
Shortly afterwards, BoE Governor, Mark Carney will hold a press conference where he will give his thoughts about the UK economy, inflation levels, and of course, Brexit. The last time he spoke he sounded a lot more positive about the resilience of the UK economy, so it would be great if this opinion was echoed in this partcilar press conference, but as I always say, never try and second guess a speech, anything can happen!
In closing, Thursday is expected to be a volatile day for the pound, and if you are trading I would suggest using stop losses and other financial tools to mitigate your exposure. We have all seen how quickly the pound can weaken, so if it is at a level you feel comfortable at currently, I personally do not see any value in gambling on the market.