The upcoming vote in the Parliament already seems less risky, after Theresa May reached a compromise yesterday, by leaving the Parliament to decide whether to delay Brexit or leave without a deal, if such has not been reached yet.
At the moment the pound is holding on to the reached higher values from yesterday, but despite that a rise above 2.30 seems hard.
Today at 21:00 will continue the voting in the Parliament, as one of the points will be a new referendum in the UK. However a new referendum seems to be in the area of fiction. Nevertheless if the Parliament votes in support of a new poll about what people’s opinion is, that would have a highly positive short-term effect on GBP and could lead to a price of 2,40 / 2,45 against the BGN.
The possibility of delay of Brexit until June is taken as a mixed signal, mostly negative and the expectations are for a new uncertainty that could have a negative impact on GBP and we could see a decline to levels of 2,24 and even 2,21.
If the UK decides to leave the EU without a deal, that could have a negative effect on the sterling, as many analysts see a drop with 10% if there is such development. Bank of England announced that they’re ready provide additional liquidity around 29 March, which is the current date for leaving the EU.
Trader Nikolay Georgiev