- Title: Sterling steady as traders wait for another Brexit deal vote in parliament
- Date: 21st October 2019
- Summary: LONDON, ENGLAND, UNITED KINGDOM (OCTOBER 21, 2019) (REUTERS) MARKET TRADERS AT CMC MARKETS WORKING ON COMPUTERS TRADER SPEAKING ON PHONE VARIOUS OF CMC MARKETS CHIEF MARKET ANALYST, MICHAEL HEWSON, BEING INTERVIEWED (SOUNDBITE) (English) CMC MARKETS CHIEF MARKET ANALYST, MICHAEL HEWSON, SAYING: "We've seen a big rally in the days leading up to the vote that was supposed to happen on Saturday and the fact that it didn't take place has just merely I think deferred the inevitable that we will get a vote and it will just about get passed, and that's what the markets are pricing in, that's why the pound is only a little bit weaker. I think if the deal gets passed albeit by a very tiny majority you'll potentially see further upside in the pound." VALUE OF POUND SEEN ON SCREEN TRADERS LOOKING AT COMPUTER SCREENS (SOUNDBITE) (English) CMC MARKETS CHIEF MARKET ANALYST, MICHAEL HEWSON, SAYING: "I think the big moments in terms of the UK are getting the deal passed, potentially there could be a vote of no confidence, potentially we could get announcement of a new election, but ultimately I think the big thing more than anything else is can Boris get the deal through parliament? If he can, markets will have a huge sigh of relief and then really it’s a question of where does the politics go to next." SIGN FOR CMC MARKETS VARIOUS OF TRADERS WORKING ON COMPUTERS (SOUNDBITE) (English) CMC MARKETS CHIEF MARKET ANALYST, MICHAEL HEWSON, SAYING: "The risks are that this goes on and on. But I think for me, the floor for the pound is in, the prospect of an imminent no-deal on the 31st of October has been pushed into the future, and I think probably the worst outcome would be a long extension to the 31st of January because the deal doesn't go through. I think that would be the worst outcome in terms of the economics because all it does is it keeps us in the Brexit waiting room for a little bit longer. Best outcome, deal gets passed and then we can move on to trade talks starting sometime in November after a brief short extension." VARIOUS OF TRADERS LOOKING AT COMPUTERS UNION JACK FLAG UNION JACK FLAG ON TOP OF HOUSES OF PARLIAMENT HOUSES OF PARLIAMENT LONDON SKYLINE, BUILDINGS BOATS ON RIVER THAMES VARIOUS OF HOUSES OF PARLIAMENT BY RIVER THAMES BOAT ON RIVER THAMES, SIGN READING (English): THAMES CRUISES VARIOUS OF HOUSES OF PARLIAMENT BY RIVER THAMES PEOPLE WALKING ACROSS BRIDGE WITH LONDON EYE IN BACKGROUND PEOPLE WALKING PEOPLE WALKING ACROSS BRIDGE WITH HOUSES OF PARLIAMENT IN BACKGROUND SCAFFOLDING COVERING BIG BEN CLOCK LONDON BUSES, TRAFFIC ON ROAD VARIOUS OF FLAGS INCLUDING UNION JACK FLAG AND EU FLAG FLUTTERING MEDIA ON COLLEGE GREEN OPPOSITE HOUSES OF PARLIAMENT
- Embargoed: 4th November 2019 09:38
- Keywords: brexit leave sterling no deal european union boris johnson analyst parliament vote remain
- Location: LONDON, ENGLAND, UNITED KINGDOM
- City: LONDON, ENGLAND, UNITED KINGDOM
- Country: United Kingdom
- Topics: Government/Politics
- Reuters ID: LVA002B21J2H3
- Aspect Ratio: 16:9
- Story Text: The Sterling held steady on Monday (October 21) as investors assessed the outlook for Brexit developments this week after parliament forced Prime Minister Boris Johnson to write to the European Union to ask for a delay to Britain leaving the bloc.
The pound remained within a whisker of its recent highs though, as most market participants believed a no-deal Brexit was off the table.
"We've see a big rally in the days leading up to the vote that was supposed to happen on Saturday and the fact that it didn't take place has just merely, I think, deferred the inevitable that we will get a vote and it will just about get past, and that's what the markets are pricing in, that's why the pound is only a little bit weaker," said CMC Markets Chief Analyst, Michael Hewson.
Johnson could pass the deal he reached last week with the EU by either winning a "meaningful vote" on it on Monday - if the lower house speaker allows a vote to go ahead - or by securing a majority when the Withdrawal Agreement Bill is introduced on Tuesday.
Either way, the probability of Britain crashing out of the EU on October 31 without a divorce deal has dropped significantly, analysts said, after Johnson was forced to seek a third postponement of the departure date.
His chances of winning parliament's approval for his deal were relatively high, analysts also said, which is the main reason the sterling is still trading close to the five-month high it reached last week.
"The prospect of an imminent no-deal on the 31st of October has been pushed into the future, and I think probably the worst outcome would be a long extension to the 31st of January because the deal doesn't go through. I think that would be the worst outcome in terms of the economics because all it does is it keeps us in the Brexit waiting room for a little bit longer," said Hewson.
"Best outcome, deal gets passed and then we can move on to trade talks starting sometime in November after a brief short extension," Hewson added.
The pound was flat at $1.2989 after jumping briefly to a fresh five-month high of $1.2993 earlier, its highest since May 13. Against the Euro, the pound was also flat at 86.04 pence.
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