Last night MPs voted for the second time on UK Prime Minister Theresa May’s Brexit deal and no surprises MPs decided to reject her deal. Earlier in the day Attorney General Mr Cox confirmed that the changes made over the weekend weren’t water-tight, therefore the UK could still get trapped in the backstop agreement. This was the reason why MPs voted against the PM.
The reaction was limited for GBP/USD exchange rates as the market had already priced in earlier in the day that the UK would not accept the deal. Today MPs will be back in the Commons to debate leaving the EU without a deal. It’s common knowledge that a majority of MPs don’t support this, therefore I expect the vote to get voted down tonight and then tomorrow MPs to extend Article 50.
What next for Brexit?
The Prime Minister last night stated that an extension is not a foregone conclusion as all 27 member states need to agree to it and EU leaders want further clarity on what the UK actually want before agreeing. Even if the UK receives an extension this still doesn’t solve the problem. The PM questioned MPs on what they actually wanted. No deal Brexit and another referendum were two of her choices.
Clearly there is no majority and that is the problem. However if MPs can’t decide and are unwilling to take the UK out of the EU without a deal, I only see two options, the EU force the UK out of the EU without a deal or another referendum and let the people decide.
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US economic data
In other news, US economic data over the last 2 trading days has been mixed. Non Farm Payroll numbers and inflation have disappointing, however wage growth and unemployment have impressed. All eyes remain on the President Donald Trump and how the trade wars saga unfolds. If a resolution is found, surely this will give strength to the US dollar?
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