In another twist and turn in the Brexit debate, MP’s in the British parliament yesterday voted for a extension, in defiance of Boris Johnson’s pitch of ‘his deal or no-deal’. This forced Boris Johnson to seek the extension for the EU as per the terms of the Benn Act and Boris has written his letter to the EU.
Sterling exchange rates to experience volatility this week
Pound to euro exchange rates which had risen to their highest since May on the interbank rate of 1.1660, could face some turbulence when markets open as the news is digested by financial markets.
Sterling has been a bellwether of the sentiments on Brexit and the potential for the extension and removing the immediate threat of no-deal has seen the pound finding support.
Financial markets do not like uncertainty, and the lack of clarity surrounding a no-deal has been keeping sterling under pressure ever since the EU vote back in 2016.
The Letwin amendment voted on yesterday sought to postpone any votes until the Withdrawal Bill had found enough support to be passed into law. It forced Boris to go back to Brussels with the letter to seek extension, but the PM has not signed it, and written another letter encouraging the EU to reject the extension.
When will the next meaningful vote take place?
The pound could be facing a busy week as this news is digested, plus Boris seeks to enforce the Withdrawal Bill with another vote perhaps tomorrow or Tuesday.
It has been widely documented that the pound may find some increased volatility from these events with many of the weekend’s newspapers focusing on what will happen to the pound when markets open this evening and early tomorrow morning.
If you have a position to buy or sell the pound against the euro, and wish to discuss some strategy to help with the planning and timing of an exchange, please fill in the the form below. Thank you for reading and we look forward to sharing more news as this situation unfolds.