Sterling falls from its 5 month highs against the US Dollar as Brexit delay appears likely

The Pound has pulled back from the 5-month highs we saw late last week, after a busy weekend of politics has added to the confusion and lack of clarity surrounding Brexit.

Parliament passes Letwin amendment

MP’s took to their seats in Westminster on Saturday for only the 5th time in history and for the first time since the Falklands war, as UK Prime Minister Boris Johnson had hoped for a decision on his withdrawal deal only for parliament to delay the crucial vote. The Letwin amendment passed by 322 votes to 306, therefore parliament will withhold approval of the prime minister’s deal until the withdrawal bill implementing Brexit has been passed.

There will now be further votes this week which could impact Sterling exchange rates. Boris Johnson has also sent an unsigned letter to the European council requesting a Brexit delay which the fact that he didn’t sign it making headlines within the UK.

will there be a Brexit extension?

Despite the last minute headaches for Boris Johnson and his plans to carry out the Brexit before the 31st of this month, the Pound has managed to hold onto much of its recent gains from the past 6-business days as it appears that a disorderly Brexit has been avoided. One topic of discussion will be whether the EU leaders will allow for a Brexit extension is one is needed, as previously some EU leaders such as French president Macron and outgoing EU Commissioner Jean-Claude Junker have both ruled out extensions previously.

Over the weekend investment bank Goldman Sachs lowered the chances of a no-deal Brexit down to 5% from their previously prediction of 10%, and they reiterated their prediction that the UK will leave the EU on the 31st of this month.

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