Cable trades close to yesterday’s high of 1.3288
The pound is staying perky as buyers are seen fading dips as risks of a no-deal outcome are seen receding this week. With May offering lawmakers a chance to take that off the table should her meaningful vote fail, odds are we’re not going to be headed for a hard Brexit come 29 March. If anything, an extension looks to be the worst-case scenario now and even that is better than a no-deal outcome.
For cable, the key level is the 1.3300 handle as that continues to pose decent resistance to any upside move for now. I reckon we may need to clear the next hurdle of today’s Brexit motion debate and vote before the pound is able to post further gains from here.
Looking at the motion later, I would expect parliament to side with May considering she has given them the option to rule out a no-deal outcome in two weeks’ time should her Brexit deal fail to bear any fruit when it comes down to a second meaningful vote.
Hence, that should be able to lift optimism as May heads back to Brussels to finalise changes on the political declaration. However, it remains unclear if parliament will back such changes as they won’t be legally-binding.
Regardless, for now though, at least May’s head is off the chopping board and that will help the pound gather some bids in the meantime before we deal with the issue of a meaningful vote before 12 March.