GBP / USD: maybe a big Brexit final is coming

On Monday, the sterling pound against the dollar fell at the closing of bidding as none of the alternative exit scenarios for the United Kingdom from the EU again satisfied the House of Commons. For most of yesterday, the British currency remained under pressure but then sharply strengthened.


The statement of the country's Prime Minister Theresa May about her desire to meet with opposition representatives to develop a common action plan for Brexit acts as the driver of the pound.

"I intend to sit down at the negotiating table with opposition leaders and try to harmonize the plan, which we all stick to in order to make sure that we leave the EU and do this with a deal," she said.

According to her, further extension of the term of Article 50 of the Lisbon Treaty will be required in order to find a compromise regarding the conditions for the withdrawal of Foggy Albion from the EU.


At the same time, the head of government clarified that she intended to request a postponement of Brexit from Brussels only for a short time so that the UK would not have to participate in elections to the European Parliament.

In turn, European Council President Donald Tusk noted that it was too early to judge whether May's plan to reach a compromise on Brexit would be successful.

"The EU can agree to postpone Brexit's latest date if British politicians form a consensus around a realistic way out of the alliance," said Danish Prime Minister Lars Lokke Rasmussen.

According to the experts of Goldman Sachs, a turning point may come soon in the situation with Brexit.

"Perhaps we are approaching a big final. We think that there really is progress, despite all the votes that failed in the British Parliament. Instead of the scenario of a long impasse or unorganized withdrawal of the United Kingdom from the EU, developments can go in the direction of a "soft" Brexit, which includes permanent membership in the Customs Union, along with a new referendum, "experts say.

It is assumed that if May succeeds to have an acceptable deal option for the EU with the Parliament, then the pound will have a chance to realize its untapped potential. Recall that before the referendum on the membership of Foggy Albion in the EU in the summer of 2016, the British currency was trading near the $1.5 mark. Of course, one can hardly count on returning to those levels but the GBP / USD pair is quite capable of rising to the area of 1.35-1.4.

The material has been provided by InstaForex Company -