GBP / USD: British racing continues, the Brexit saga does not end

On the eve of the deputies of the House of Commons, they voted against the UK withdrawal from the EU without an agreement.

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After the British parliamentarians virtually eliminated the “hard” version of Brexit, the pound sterling rate first jumped sharply against the dollar but then returned to its original positions.

Apparently, market participants were inclined to expect such a decision by lawmakers and the pound became hostage to the “buy on rumor and sell on the facts” strategy and feeling the effect of profit taking.

Now, the pound is again trying to strengthen against the dollar.

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Today, British lawmakers are to vote for the postponement of the date Brexit, scheduled for March 29.

As for Prime Minister Theresa May, she still intends to fight for her version of the deal and next week there will probably be a third attempt to conduct it through the House of Commons. The head of government has already said that if the deal cannot be agreed by March 20 on the eve of the next EU summit), then it will be necessary to extend Article 50 of the Lisbon Treaty for a longer period.

It is possible that Theresa May’s warning about a long delay is a kind of tactical move aimed at convincing the Brexit supporters from the Conservative Party and their allies in the Democratic Unionist Party to support the deal before it is too late.

“The clarity about what is actually happening around Brexit, was not much more than yesterday,” said Westpac currency strategists.

“The most likely scenarios are the passage of a deal promoted by Teresa May through parliament in the future or a new referendum. Which of these two scenarios is being implemented – it will become clear already this week, “experts told ABN Amro.

Goldman Sachs experts believe that the extension of the Brexit deadline will be good news for the pound because it will create the conditions for maintaining close relations between the UK and the EU.

“We expect a rally of pounds to 3-year highs if the Brexit postponement step opens the door to softer results, which include joining a customs union, membership in a single market or a repeated referendum, although there are still risks including a growing likelihood general election” they said.

The material has been provided by InstaForex Company – www.instaforex.com