Day X for Britain: will the European Union lose one "star"

At the beginning of this week, the GBP/USD pair consolidated in a narrow range of 1.31-1.32. On Wednesday, it attempted to break through its upper border but then left the range and rolled back in the direction of the 1.30 mark.


"The market is now more than ever concerned about the fact of uncertainty regarding the UK's withdrawal from the European Union. From this point of view, the weakening of the pound looks more than logical. The situation on Brexit remains at a standstill. The British Parliament clearly indicates what it does not want but it's not clear what it really wants, "said Lee Hardman, currency strategist at Bank of Tokyo-Mitsubishi UFJ.


Today in the House of Commons should be another vote on the draft "divorce" agreement proposed by British Prime Minister Theresa May.

It is assumed that only the conditions for leaving the country from the EU without a political declaration will be put to the vote. This formally meets the requirement of the speaker of the House of Commons, John Bercow, to the government to make a modified version of the transaction.

"It is extremely important that we do everything to approve the agreement this week. If we don't want to find ourselves in a situation, in which, we again need to ask for Brussels to grant Brexit a postponement and then also to participate in European elections," said Andrea Leadsome, leader of the House of Commons, a deputy from the Conservative Party.

"This week in the British Parliament held eight votes" against "now you need only one vote" in favor "to move on", said by the official representative of the European Parliament, Margaritis Schinas.

If the House of Commons approves the deal, the UK will leave the EU on May 22.

Meanwhile, the fact that there is no positive parliamentary decision on the deal will not necessarily be negative for the pound sterling.

On Wednesday, lawmakers rejected all eight alternative voting scenarios related to Brexit. However, two options scored the most votes. One of them is to maintain membership in the European Union, and the second is to hold a second referendum.

That is, there is an option, in which to ensure compliance with the requirement, "it is impossible to leave the EU without an agreement", the Brexit itself will have to be canceled.

If the likelihood of a repeated referendum increases, the GBP/USD pair will go upward.

Will Theresa May finally be able to carry out his agreement through parliament and will she resign after that? Perhaps, we will find out today.

The material has been provided by InstaForex Company -