GBPUSD Price: Brexit Deadline Extension Could be Good for Sterling
GBP price, Brexit news and analysis:
- British Members of Parliament will likely vote Wednesday to rule out a no-deal Brexit. The vote takes place at 1900 GMT.
- However, more important for the GBPUSD price could be a vote Thursday in which MPs will likely ask the EU for an extension of the March 29 Brexit deadline.
- That could help Sterling to rally, although EU agreement to an extension is not guaranteed.
Sterling firm ahead of more crucial Brexit votes
GBPUSD is modestly higher in early European business Wednesday ahead of a vote in the UK Parliament at 1900 GMT to rule out a no-deal Brexit. Members of Parliament will likely vote against leaving on March 29 without a deal, although that will remain the legal default.
For GBP traders, however, a vote Thursday on whether to ask the EU for an extension of the March 29 deadline could be more important. There is no guarantee that the 27 other EU members would agree an extension but a UK vote in favor would still likely help GBP and reduce volatility in the currency.
GBPUSD Price Chart, Five-Minute Timeframe (March 12-13, 2019)
Chart by IG (You can click on it for a larger image)
Directional trades in GBPUSD and the Sterling crosses remain problematic and the Brexit turmoil will still likely deter traders from going long riskier assets more generally. However, GBP bulls could take comfort from the increasing prospect of Parliament wresting control from the Government, with a snap general election and a second referendum both still possible, albeit unlikely for now. The EU has said there will be no further negotiations on a deal.
In the meantime, the UK Chancellor of the Exchequer will present his Spring Statement to Parliament earlier Wednesday. Essentially a mini-Budget, it usually garners plenty of attention but today will likely be ignored.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.