The last week was highly unstable for the pound sterling. The British currency followed mixed trends over the week. At the same time, the market bet on the current week as it was essential for the Brexit process. The UK MPs have made it clear lately that they would not accept no-deal Brexit and would not revise the departure date, but also rejected plans for the second referendum. For reference, the UK is expected to leave the European Union on March 29.
However, strong uncertainties persist as no one can say for sure whether Brussels will meet Theresa May's proposal regarding the Brexit delay. As a result, the upcoming week will be both important and challenging.
As for UK Prime Minister, Theresa May, she wants the parliament to vote on her variant of the agreement for the third time by March 20. For reference, the previous two voting failed to bring luck to Theresa May. Thus, if she finally wins, the UK will leave the EU and the pound can get stronger on some easing of the tensions.
In the case of the opposite scenario, the Brexit proposal will be rejected for the third time putting the government in even deeper confuse, while the country may face a lot of political risks. The most favourable situation of the possible negative scenarios will be approval of soft Brexit after a long delay. At the same time, there is still a chance of general elections. Moreover, the parliament can reconsider the second referendum even after it rejected this variant earlier.
The EU members (27) are expected to hold several meetings this week. It is quite possible that any of them can be against the Brexit delay being annoyed with an already long-lasting process. In this situation, the pound-to-US dollar rate can plunge below $1.30 and even to $1.25.
All these factors show that investors will keep an eye on the situation and responding to all Brexit reports. This, in fact, means that traders will not dare to make long-term forecasts for pound rate. At the same time, the overall pound volatility can remain in the spotlight among the market players.