GBP / USD: uncertainty around Brexit puts pressure on the pound

Today, British Prime Minister Theresa May is due to submit to the House of Commons an updated plan for the country's withdrawal from the European Union, the vote on which is scheduled for January 29.

Details of the so-called "plan B" by Brexit were not disclosed.

It is assumed that the head of government will have to significantly change his position on the "divorce" agreement to win over, in particular, the Labor Party. Apparently, the latter are preparing to introduce an amendment that would force Theresa May to request Brussels to extend the membership of the United Kingdom in the alliance.

Also, Brexit supporters, who seek to exclude from the deal with the EU provision on the "insurance plan" for Ireland, in the Conservative Party can submit the proposal. In addition, parliamentarians can propose an amendment requiring a new referendum on Brexit.

Meanwhile, the Prime Minister, not expecting to find a common language with representatives of the opposition and various parties, prefers to try his luck on the continent and achieve a revision of the provisions on the Irish backstop, Bloomberg reports.

It is not excluded that Theresa May is not going to be original at all, presumably retaining a negative attitude regarding the question of postponing the country's withdrawal from the EU in accordance with Article 50 of the Lisbon Treaty, which probably means refusing the deal.

Thus, there are several options for further developments:

1. Conduct a re-referendum on Brexit after clarifying the terms of the transaction.

2. Preservation of the UK stay in the European Economic Area.

3. The United Kingdom leaves the EU without an agreement.

As for the British currency, its recent growth and subsequent attempts of the GBP/USD pair to break up are most likely related to expectations regarding the extension of the Brexit process or the implementation of the "soft" option. However, it should be considered that any of the above scenarios implies the absence of any clear plan on trade and economic relations between Brussels and London, which will adversely affect the country's economy and the sterling pound rate. Based on this, we can expect a decline in the GBP/USD pair in the medium term.