The Pound enjoyed a day of sustained gains and leapt to a 10-week high on Wednesday after the Labour party announced that it would back an attempt by lawmakers to prevent a no-deal Brexit. Despite the fact that the United Kingdom is due to leave the European Union on March 29 but has no approved deal; the pound is enjoying a recent rally as investors are beginning to bet that a no-deal Brexit can be avoided altogether. This is seen as avoidable if parliament exerts greater control on the process.
This day of gains follows on from strong employment data on Tuesday which pointed to a robust labour market despite the recent economic slowdown. Recent optimism has also stemmed from a possible delay to Brexit, and an amendment by lawmaker Yvette Cooper that would see Theresa May having to ask for a delay on the March date. This is being voted on next Tuesday and is fuelling newfound optimism in the market. However, delaying does not point to any solution so sterling is unlikely to continue to rally simply on the basis of a delay.
12.45 – EUR: ECB Interest Rate Decision; expected to remain unchanged at 0%
12.45 – EUR: ECB Deposit Rate Decision; expected to remain unchanged at -0.4%
13.30 – EUR: ECB Monetary Policy Statement & Press Conference