On Friday (January 11th), there were reports that the possibility of a Brexit delay until March 29th increased, and the pound sterling soared nearly 100 points to 1.2851. However, the pound then quickly fell back to 1.2800, as the British Prime Minister’s spokesperson Teresa May reconfirmed, and Teresa May ruled out the implementation of Article 50 of the Lisbon Treaty.
According to the London Evening News, before the UK leaves the EU, it must pass at least six important bills, which makes many British cabinet ministers think that the Brexit schedule will be extended. These bills include delays in the old immigration bill, which has not yet been announced, let alone debate. According to sources, even if members are required to work on weekends and cancel the holiday in February, they may not be able to provide enough time to avoid requesting an extension. A senior minister said that the current legislative timetable is very urgent.
At the same time, Teresa May is constantly striving to get the agreement approved by the parliament and try to avoid the occurrence of non-agreement. She said that the EU leaders will continue negotiations on the reserve agreement in the next few days, and the parliamentarians will know the EU's guarantees on the reserve agreement before voting.
However, with the parliamentary vote approaching, May encountered new resistance in an important parliamentary vote held on Tuesday, which was the first parliamentary vote defeated by the Mei government in 2019.
On January 8, the British Parliament passed an amendment to the budget enforcement case with 303-296 votes. The amendment requires that the UK Treasury can modify the tax law to maintain a smooth transition of the tax system only in the three scenarios of the conclusion of the Brexit agreement, the complete cancellation of the Brexit, or the approval of the parliament to deal with the non-agreement of the Brexit.
After the December vote was postponed, the British Parliament is ready to vote on the Brexit agreement next Tuesday. however,AnalystWe believe that the situation has not changed much, and it is expected that the pound will experience sharp fluctuations next Tuesday.
Media reports, chief of Morgan Asset Managementmarketing strategyKaren Ward said at an event in London on Wednesday that if the agreement is passed, next Tuesday the pound will be dominated by other majors.currencyMay increase by up to 4%.
Nomura analysts predict that if the agreement is not approved by the parliament, the pound may fall more than 2% against the dollar.
Dutch cooperationbankJane Foley, head of foreign exchange strategy at Rabobank, said in an email to the media that if the vote is passed, the pound is expected to return to the 1.30 level against the dollar; if it fails, it will be near the 1.25 level.
(Article source: Global Forex)