Sterling volatility remains elevated ahead of today’s crucial House of Commons vote on Prime Minister May’s Brexit deal which is scheduled for after 19:00 London time. The GBP/USD cross had surged from below 1.30 yesterday morning to 1.3250 late last night after it emerged that Prime Minister May had extracted further concessions from the EU on the issue of the “backstop”. Sterling was given further support this morning following the release of data showing that UK GDP growth had picked up to 0.5% mom in January after a lacklustre 0.2% qoq in Q4 2018.
But Sterling’s rally proven short-lived and GBP/USD fell back below 1.31 this lunchtime after the British Attorney General, Geoffrey Cox, stated to the cabinet and parliament that the addendums to the Withdrawal Agreement, which Prime Minister had negotiated with her EU counterparts, reduced the risk of the UK being held indefinitely in the backstop but did not remove it completely. Bottom line it would seem is that the UK’s most senior government lawyer has been unable to materially alter his legal advice. The concern now is that once again a majority of the 634 MPs will vote down the government’s draft Brexit deal, which could in turn trigger further parliamentary votes in coming days.
