Pound rises on talks of Brexit delay
The pound rose to as high as US$1.3099 on Monday, up 0.3% on the day. On Tuesday morning, the pound continued its ascend to US$1.3135.
The British pound rallied against the United States (US) dollar on Monday as traders turned optimistic on a possible delay on Brexit if Britain’s prime minister Theresa May fails to secure support in Parliament on her withdrawal agreement.
The pound rose to as high as US$1.3099 on Monday, up 0.3% on the day. On Tuesday, the pound continued its ascend to US$1.3135 at around 9.45am Singapore time.
Against the euro, the pound also rose 0.1% to 86.70 pence per euro on Monday but dipped by 0.25% on Tuesday morning, at 86.58 pence per euro.
The British parliament is due to vote on the Brexit amendments on Wednesday, and the developments will be a source of focus for traders.
The pound has regained some composure and have returned to the levels seen at the end of last month, following jitters on a ‘no deal’ Brexit that sent the pound crashing to lows of US$1.2773 against the greenback in the middle of February.
Theresa May says she needs more time to amend Brexit deal
On Sunday, United Kingdom’s (UK) Mrs May appealed for more time to be given to her to renegotiate the Brexit deal, suggesting that parliament may not be able to vote until around 2.5 weeks before the stipulated Brexit date of March 29th.
Business leaders and members of parliament (MPs) cried foul after the speech from Mrs May, and prompted for a delay on the Brexit deadline to avert a ‘no deal’ exit which will see Britain crashing out of the European Union (EU) without a deal.
Labour’s Brexit spokesman Keir Starmer called Mrs May’s move to delay the vote the ‘height of irresponsibility’.
‘Theresa May is recklessly running down the clock in a desperate attempt to force MPs to choose between her deal and no deal. Parliament cannot standby and allow this to happen,’ Mr Starmer stated.
The prime minister’s Brexit withdrawal deal was rejected last month, and she has been meeting with European leaders to fix the deal, primarily working on the concerns with the Irish ‘backstop’ plan.
Cooper amendment to postpone Brexit deadline could see the light, pound set to rally further
The Cooper amendment proposal, which seeks to prevent a ‘no deal’ Brexit by giving the government more time to reach a formal agreement with the EU, was rejected in January but it may be passed this time round as three government ministers have added their support.
Analysts expect the pound to appreciate if Mrs May fail to threaten the Parliament on a ‘no-deal’ situation.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Trading around Brexit
Find out how the UK’s exit from the EU continues to affect traders, and discover:
- The unique opportunities in a ‘hard’ and ‘soft’ Brexit
- The markets you should be watching
- Everything that’s happened so far
Live prices on most popular markets
- Forex
- Shares
- Indices
