Sterling crashes lower as hopes for Article 50 extension disappear…
The pound fell last night after a dramatic evening of amendment votes in Parliament. One of the two amendments we’ve discussed in previous reports failed to pass, removing any hope we may see an extension to the March 29th leaving date.
Yvette Cooper’s amendment to see up to a 9 month extension of Article 50 failed to gain enough support last night, losing by around 20 votes. This is a blow to many who had hoped Prime Minister May would be given a clear mandate to ask the EU for more time to get plan B into shape and negotiate a new deal. Sterling immediately fell on the back of this defeat, falling from the $1.3150 level against the greenback to the $1.3050 level at its lowest point. The next amendment which created a lot of hype was created by MPs Brady & Murrison. It was tabled to instruct the Prime Minister to head back to Brussels and seek alternative arrangements in respect to the backstop. This amendment passed, meaning it’s now down to May to attempt to reopen negotiations. Sterling didn’t take any relief from this amendment passing, after all, it’s still highly uncertain as to whether the EU have any compromise in them when it comes to the Irish border situation. Sterling is likely to remain under pressure for the foreseeable future. As it stands, we’re still leaving on the 29th March and have no deal which would see a working majority. Article 50 is far from being extended and anyone hoping for a snap referendum should think twice.
Today sees a raft of US economic data. Lunchtime sees inflation, employment, Q4 GDP and housing data while the evening sessions sees a rate announcement and press conference from the Federal Reserve. All eyes will be on Jay Powell and any sliver of information he provides on the outlook for the US economy and interest rates.
Written by Viv Savani. 8:38am, January 30th 2019
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