Will MPs back Theresa May’s deal in tonight’s Brexit vote

Late Monday night Prime Minster Theresa May stood alongside European Commission President Jean Claude Junker, announcing to the world’s press that they had mutually agreed the legally binding changes to the Brexit withdrawal deal. PM May spoke with confidence explaining the latest amendments to the deal; the 3rd and final one Jean Claude Junker was keen to point out, was the last thing needed before Government MPs would vote in support of her deal, reversing last month’s disastrous commons defeat. If successful, this would allow Theresa May to keep her promise to deliver the Brexit voted by the people and exit on 29th March.

This news gave the pound a massive boost reaching 1.1790, its highest levels against the euro since May 2017. Unfortunately, and not surprising looking back at Brexit related events over the last 3 years, these gains proved to be short lived. On Tuesday morning, news started to creep out that many MP’s were not convinced by the latest amendments and would not back the deal May is due to present. By midday Attorney General Geoffrey Cox stood in the house of commons and made clear that this latest deal was little to no different from previous proposals and added no assurances regarding the well document Irish Backstop. Essentially the updated deal only reduces the risks of being tied in Irish backstop forever, however fails to eliminate the risk.

As a result, after seeing the pound hit a 22 month high against the pound, the gains were quickly reversed by midday on Tuesday, falling to a low of the day at 1.1554, as the market struggles to work out where we go next with Brexit. We will now watch this evening’s vote closely in the House of Commons to see if the unlikely will happen and Theresa May gets the numbers needed to back her deal, the last time out she was defeated by 230 votes.

With 17 days to go until the originally proposed leave date, the 29th of March, and probably twice as many more questions than answers, it is near on impossible to gauge which way the next the interbank GBP/EUR exchange rate will head.

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