GBP / USD: the British parliament refused to extend the terms of Brexit, the pound fell - ConsultFX

GBP / USD: the British parliament refused to extend the terms of Brexit, the pound fell


The pound sterling reacted very painfully to the results of the next Brexit vote in the House of Commons.

On the eve, the British currency depreciated against the dollar by 0.8%, showing one of the strongest falls in the current year.


Judging by the dynamics of the pound, investors do not expect a quick resolution of the situation around Brexit.

Despite the fact that yesterday parliamentarians adopted the amendment of Caroline Spelman, designed to eliminate the possibility of the UK leaving the EU without a deal, this scenario is still not worth writing off. At the same time, Graham Brady's amendment, which provides for an alternative option to the backstop mechanism, does not suit Brussels, whose representatives have repeatedly stated that they do not intend to change the text of the agreement with London, although the House of Commons refuses to approve it. Meanwhile, the amendments, which were supposed to expand the powers of legislators on the Brexit question and allow them to extend the validity of Article 50 of the Lisbon Treaty, were not adopted.

In recent weeks, the pound has grown primarily on expectations that the implementation of the "hard" scenario can be avoided or postponed by Brexit for several months. However, the last vote in the House of Commons only increased the uncertainty, which could lead to a weakening of the British currency.

"The results of further negotiations between London and Brussels on the "divorce" agreement are now difficult to predict, and the worst option for the British economy still looms on the horizon, which is of primary importance for currency players. Therefore, it is possible that the mark of 1.30, although it is an important level of support for the GBP / USD pair, will still be broken down," experts say.

The material has been provided by InstaForex Company -