Brexit: Will Theresa May eventually have luck in Parliament?

Posted 18 March, 2019

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.
 

Previous forecast

25 March, 2019 16:46

← Oil price slackens but uptrend still possible

Oil prices have kept sliding this week. Brent quotes slumped from $68.7/bbl hit lately to some $66.53/bbl. This decline is a clear sign for the profit-taking after the leap, but it also does not offset possible further upturn. The weakening is said to be caused by strong resistance faced at $68.6 that was observed in November 2018. The current decline is quite obvious and can continue driven by the risks around unpredictable Brexit and US-China talks.

Oil price slackens but uptrend still possible

Next forecast

15 March, 2019 17:10

Pound sterling remains highly volatile after hitting last-year peaks →

The pound sterling has been moving up and down lately, while now it maintains heavy volatility ahead of the UK's departure from the EU slated for March 29. Investors are waiting for the voting on the delay of EU leaving, which can entail certain risks for the pound. Strategic investors have faced challenges as this situation does not let them plan further actions in the market. Another important issue is to understand whether the UK manage to retain the status of a safe place for business after the political turmoil. Further pound movements are unclear in this situation, though one of the scenarios is that investors can start selling pound on the market reports while waiting for the voting results, following the EU decision on the delay.

Pound sterling remains highly volatile after hitting last-year peaks
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