Despite being slightly down on the day, the pound is holding on to most of the gains achieved last week, trading just above $1.29. Markets are waiting for today’s decisions in Parliament. A negotiated Brexit, according to the terms agreed last week between the EU and the UK, is now seen as the most favourable outcome.
If Boris Johnson fails to pass his deal through parliament, Brexit will once again be postponed. In this scenario it is likely for the pound to lose support, potentially shaving off last week’s gains. A new delay means the possibility of a general election happening before any deal is rectified. This would multiply uncertainty, as the possibility of a no-deal exit would still be on the table and potentially in the hands of a Parliament more inclined to back such an outcome.
Photo by John Cameron.
