GBPUSD Selloff Ensues After Brexit Delay Response from European Council


GBPUSD is down greater than 1 p.c thus far in the present day as the newest Brexit drama places strain on the Pound

The European Council will decide to a Brexit extension, however greater than a month shorter than what the UK hoped for and is contingent on passing a deal

For extra data on Brexit’s influence on the GBP, learn extra on How the Pound May Transfer After Parliamentary Vote

The Pound has suffered steep losses towards the US Greenback all through in the present day as the newest Brexit developments pushes GBPUSD decrease. The cable is off over 1 p.c because the probability of the UK touchdown a ‘smooth’ departure from the EU by the March 29 deadline continues to dwindle.

Prime Minister Theresa Might’s request yesterday to delay the fast-approaching Brexit deadline till June 30 was met with huge criticism and seems to be rejected by the European Council. Information has only recently crossed the wires that the European Council will decide to a Brexit extension, however greater than a month shorter than what the UK hoped for.

Try this Brexit Timeline for a chronological listing of key occasions

The present draft Brexit conclusions from the continued EU Summit in Brussels said that the European Council will agree to increase Brexit till Might 22. The delay is contingent on British MPs setting apart their variations and approving PM Might’s negotiated Withdrawal Settlement by the top of subsequent week.

Moreover, the European Council added that an extension past Might 22 is not going to be potential seeing that the UK doesn’t intend on holding European Parliamentary elections that start on Might 23.


Spot GBPUSD Price Chart Brexit Impact on Currency

Though in the present day’s GBPUSD selloff might be exacerbated by a rebounding US Greenback following yesterday’s post-FOMC carnage, spot costs have prolonged to the draw back all through the session as hypothesis mounts that the UK would possibly nonetheless crash out of the EU with no deal on March 29.

That is nonetheless a chance contemplating all EU27 members should vote on the extension which is contingent on the Home of Commons approving the Withdrawal Settlement by subsequent week. Regardless of MPs voting towards a no-deal Brexit final week, the authorized default as issues stand is for the UK to sever itself from the EU with no deal on the present March 29 Brexit date.

As such, the newest Brexit uncertainty has pushed GBPUSD implied volatility to 32-month highs. Markets will doubtless flip to European Council President Donald Tusk subsequent who will present a press assertion at 1900 CET with PM Theresa May stated to carry a press convention in Brussels later this night.

Learn Extra: Brexit Newest Places UK and British Pound at EU’s Mercy

– Written by Wealthy Dvorak, Junior Analyst for DailyFX

– Observe @RichDvorakFX on Twitter

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