The British Pound is expected to endure a day of volatility as reactions from the EU to Prime Minister Boris Johnson's new set of Brexit plans are due, and he takes the stage to deliver his speech to the Conservative Party conference in Manchester.
The outcome of these events could well offer up some volatility to Sterling.
Midweek sees the Pound-to-Dollar exchange rate trading at 1.2285, down on the week's high which is at 1.2344.
According to The Telegraph, who claim to possess the leaked documents, the UK intends to propose "a radical new â€˜two borders for four years’ Brexit plan which will leave Northern Ireland in a special relationship with Europe until 2025." The plan requires a need for both a regulatory border between the UK and Northern Ireland in the Irish Sea for four years as well as customs checks between Northern Ireland and the Ireland.
Expectations for a 'no deal' Brexit could well start rising again, thereby putting downside pressure on Sterling.
It is suggested that the plan being made to the EU is a 'final offer', and the thinking of the Prime Minister in the event that it is rejected will likely be revealed when he appears before delegates at the Conservative Party conference in Manchester today.
The Conference speech will unlikely touch on the details of the UK's latest Brexit plans, instead the significance of the appearance could lie in how Johnson positions himself on the issue of taking the UK out of the EU on October 31 'come what may'.
Johnson's stance on the issue has become entrenched, but with Parliament passing legislation that in effect outlaws a 'no deal' Brexit on October 31 it has become difficult to see how the Prime Minister might deliver on his promise.
"The spotlight on Wednesday will be on UK Prime Minister Boris Johnson’s 'final, take-it-or-leave-it offer' for a Brexit deal to Brussels on Wednesday with the likely accompanying threat that Johnson will not negotiate a delay at the European Council on 17-18 October under any circumstances," says Quek Ser Leang, a foreign exchange analyst with UOB.