The GBP/USD cross, which had yesterday pushed above 1.32 in the wake of important parliamentary votes before correcting down to 1.306 late in the session, has stabilised today. MPs yesterday voted through two amendments – one which takes the option of the UK leaving the EU without a deal off the table and the other which gives a green light to the government to re-open negotiations with the EU in a bid to revise the “backstop” currently stipulated in the draft Withdrawal Agreement with the EU.
These amendments are not legally binding and Prime Minister Theresa is clearly intent on trying to renegotiate the issue of the backstop, one of the main sticking points for MPs which a couple of weeks ago voted in large numbers against the draft Brexit deal. The question now is whether the EU is willing to re-open negotiations which could realistically last weeks or even months and potentially require the EU to agree to extend the UK’s membership to the EU beyond 29th March. EU officials have publicly pushed back at this idea but Prime Minister May is seemingly confident that she can make some headway. The Brexit saga clearly has further to run as well as the volatility.
