Conservative Party’s Annual Conference – Potential Volatility Ahead For GBP/USD?

Manchester is hardly ever the center of attention for forex traders looking for impactful political or economic events that may direct their weekly strategies. The capital of England, London, usually takes on this role. In the upcoming week, however, the Conservative Party is holding its annual conference (Sept 29^th – Oct 2^nd) in Manchester.

A Brief Overview Of The History Of Annual Conference

In light of the history of such conferences, all eyes are set on Manchester and the potential drama in the forex market that is likely to follow post-conference. The conference is expected to revolve around the Brexit debate that is likely to cause a significant movement in GBP/USD pair.

Back in 2016, the conference held under then Prime Minister of England, Ms. Theresa May, vouched for a policy shift. As a consequence, a significant bearish weekly trend in GBP/USD was observed, one that was unparalleled since the first referendum for Brexit. In the following year, the conference strengthened the rumors of exasperating challenges in the face of the government and the gradually diminishing faith in Ms. May’s ability to strike a deal with the European Union. The ramification was identical; pushing the pound sterling further down.

What To Look For This Year?

This year, traders from across the globe will focus on Prime Minister Boris Johnson’s stance towards the European Union. Mr. Johnson has pledged to finalize Brexit by the current deadline of October 31^st either with a deal or without it. In any case, the conference is being anticipated to hold much political/economic significance for the forex traders interested in “Cable”.

The high-volatility in GBP/USD pair is no longer novel for the traders following the Brexit events. While the deadline is approaching, the possibilities for Brexit are still wide open including a further delay, England’s no-deal exit from the European Union, and even an early election. As per a senior strategist from Union Bancaire Privee, Mr. Koon Chow, the annual conference may shed some light at the likely prognosis for Brexit in the months to come.

Mr. Chow has further stated that in the long run, an early election could potentially be positive for the Pound Sterling. As per the financial experts, the uncertainty regarding Brexit is what continues to keep the pressure on the currency. A consensus among the Parliamentarians, potentially following an early election could significantly strengthen the chances of a deal with the EU, consequently removing the weight from the Pound, says Mr. Chow.

Recommendation For Sterling Traders

All in all, forecasting the political and economic events of the week ahead, a senior strategist from Societe Generale SA, Mr. Kenneth Broux has recommended keeping the short positions on GBP/USD until the chances of a Brexit deal are brought closer to the reality.