Last night, MPs voted 321 v. 278 to reject leaving the European Union on the 29th March without a deal. It’s now inevitable there will be a short extension to Article 50 until June.
2 things can be taken from last night’s event. Firstly, how effective live market orders can be. The GBPUSD and GBPEUR rates were trading around $1.32 and €1.1650 at close of play last night (circa 6pm). Following the voting outcomes both pairs saw huge spikes which took them to just shy of $1.3350 and €1.18, respectively. Many of our clients utilise this function already but it’s still a overlooked tool, which can be extremely advantageous to use over events which are likely to be volatile. Both currency pairs begin Thursday trading over a cent lower than their overnight peaks. Secondly, the current state of UK politics is in complete disarray!
Last night’s events have caused a big stir around Westminster. The actions of the government have already been widely criticised by all parties including the Tories. PM May finds herself in a very tricky position and no doubt calls for her to resign will be sounding loud and clear this morning. No one can deny her commitment to the Brexit process nor her absolute resilience in the face of continued adversity. However, she’s continually bet big and lost. We now await a vote in Parliament to extend Article 50 today. Believe it or not though, it’s become apparent we will be seeing a 3rd meaningful vote take place, as early as next week! A rather memorable quote from Albert Einstein springs to mind – “The definition of insanity is doing the same thing over and over again, but expecting different results.”
For now, the pound is thriving on the idea of no-deal being taken away. However, when the process is becoming more of a shambles by the day, there’s only so long before traders and dealers will turn the other way. Be aware!
Written by Viv Savani. 8:52am, March 14th 2019
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