The pound spiked on Wednesday evening after British lawmakers voted against leaving the European Union without a transition agreement. Despite this being heralded as a ‘free-vote’, this is another damaging defeat for Theresa May. Lawmakers will now vote today on whether the UK should delay their departure from the EU on March 29th. There is also speculation that they could vote again on her deal next week, with Brexiteers nervous about the new direction of Brexit and now willing to compromise on their previous demands.
In the immediate aftermath of the vote, the pound soared and was up more than 1 percent against the euro and dollar. The chances of a disorderly Brexit have been substantially reduced as this is seen as a big win for sterling. The vote outcome and the decision to give the house a chance to vote on delaying Brexit saw the pound surge. The barrage of news this week has kept the pound in an extremely volatile state, as rates have swung wildly on the news coming out of Westminster and Brussels. However it seems that expected volatility may now be starting to settle after this vote, as one-month risk reversals traded near their lowest levels since December 2018.
19.00 - GBP: UK Parliamentary Vote on Brexit Extension