Pound volatile after latest vote
Published on 14.03.2019 10:56

There remains uncertainty in the Forex Market with regards to the British pound going forward after yesterday’s voting in the British parliament where the decision to leave the EU with no deal was taken off the table.

This now sets the stage for another vote later in the week where the parliament will decide whether to extend the deadline for Brexit which some say is going to add to the uncertainty and put further pressure on the GBP/USD.

Even if the British parliament vote for an extension it doesn’t mean it will be accepted by the European side and Prime Minister May noted that they will require a compelling reason to agree to shift the deadline which has to be agreed on by all EU member states

“Let me be clear that voting against leaving without a deal and for an extension does not solve the problems we face,”

Mrs. May said. “The E.U. will want to know what use we mean to make of such an extension, and the House will have to answer that question.” She added.

The pound briefly hit a 9-month high after the latest round of Brexit voting and it seems like the market prefers a scenario where the UK leaves the EU with some sort of deal and as long as that option remains valid there are still going to be some strong backers for the British currency

"Parliament has made it clear that unless there is a deal, they are not ready to leave the EU. Sterling traders are in love with this concept and this pushed the price of Sterling higher against the dollar," said Naeem Aslam, chief market analyst at Think Markets UK


Andrew Masters

Analyst

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