The pound started the European trading session today with an upswing before slumping more than 1 percent after comments from the UK attorney general cast doubt on the ability of British Prime Minister Theresa May to push her Brexit deal over the line when the vote is held later today.

Prime Minister Theresa May announced earlier in the day that she had secured some concessions regarding the backstop which has been the major thaw in securing a deal between the EU and the UK for the later’s departure from the European Union.

The concessions however where thrown into disarray some time later with Attorney General Geoffrey Cox pointing out that risks still remain with the backstop.

This uncertainty sets the scene for some wild volatility in the pound as we head into today’s vote which could cause the pound to move as much as 10 percent in the coming days. Depending on the outcome.

If Prime Minister May’s deal is defeated this evening and the vote is followed up by a decision by British lawmakers to allow a possible no deal Brexit, the British currency is in for some heavy losses according to some analysts.

“We believe the pound would fall 4 percent to 8 percent if the Parliament agrees to a hard Brexit.” said Joseph Capurso, senior currency strategist at Commonwealth Bank


Analyst

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