May’s Brexit deal reaches meaningful vote
15 January, 2019
Today Theresa May finally puts her Brexit deal to the meaningful vote in parliament, 2 and a half years on from the UK’s referendum result to leave the EU. After years of negotiations and political upheaval, Brexit is finally reaching its conclusive period and things are developing at a rapid pace.
Since Friday the pound has risen around 2% ahead of this evenings vote which has until now, been heavily expected to be rejected my MP’s. The last few days has however thrown some last minute developments, shifting the probabilities of the various outcomes this week. The meaningful vote this evening will trigger a succession of events in the coming weeks that will shape the country for years to come. Theresa May has piled the pressure on MP’s to vote for her deal by saying that if her deal is rejected, then ‘No Brexit’ is a greater likelihood than a ‘No Deal’ which has shifted sentiment back towards the pound given that she is expected to lose the vote. Yesterday afternoon the PM also confirmed that recent concessions from the EU are legally binding, which is thought to be enough for a number of her own Tory back benchers to change their mind and back her deal.
With an expected loss on this vote, market reactions will likely come down to the details of just how many votes are counted on either side. If she loses marginally then the chances are she will go back to the EU for final concessions to push this deal through a 2nd time around, however if she loses by a large margin then we could very well see a vote of no confidence from Labour and a general election to come. A ‘No Deal’ outcome remains on the table however seems to be a less likely scenario now than it was a few weeks ago. We can expect further volatility today as traders speculate and position themselves for the vote this evening, likely to happen around 7-8pm. Whatever the outcome tonight we can expect a turbulent week for exchange rates, and if the PM’s deal is voted down then we will know more about the next course of action by the end of week at the latest.
Anyone with a need for currency in coming weeks or month would do well to stay in close contact with your broker throughout this week. If you are concerned about potential adverse movements that could affect your budget, then ask about our LIMIT orders and STOP LOSS orders than are perfect for managing your risk in these conditions.
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