The pound stayed near the $1.30 mark yesterday, losing only 0.02%, with the Speaker of The House blocking the government’s Brexit withdrawal deal coming to parliament for a second time. Investors are now covering short positions as the likelihood of a no-deal Brexit has been reduced, with most believing a three-month extension to be most likely.
The pound gained 0.3% against the euro and has potential to rise further if the government can pass their Brexit bill in a vote today, they maintain they have the numbers to do so but the vote is expected to be extremely close. Even after this vote, MPs are free to suggest amendments which will then be voted on and will have to vote further on the Brexit timetable as well. If the government loses any of these subsequent votes, they may well withdraw the entire bill.
If the bill in its entirety were to pass, then the pound could make gains into the region of $1.35 but analysts believe it cannot push to $1.40 unless there is further positive clarity on the how the ongoing relationship with the EU will be negotiated.
GBPUSD opened at 1.2949 and rose to a midday high of 1.3006 and closed only slightly lower at 1.2977
GBPEUR opened at 1.1596 and performed similarly, reaching a high of 1.1655 and closing at 1.1637
The dollar recovered from its early losses on Monday afternoon after the Brexit negotiations were disrupted by the Speaker of The House in the UK. The dollar gained 0.05% on the pound but remains down 2.05% this month. The euro fell 0.21% against the dollar.
Elsewhere the Canadian dollar was 0.31% stronger against its US rival as investors awaited this morning’s election results. Prime Minister Justin Trudeau has retained his premiership, but his liberal party will now form a minority government.
EURUSD opened at 1.1165 and dropped steadily across the day, reaching an afternoon low of 1.1143 and closing at 1.1152