Sterling Marches On

GBP

The pound surged to 22 month highs as optimism builds over a no deal Brexit looking less likely. Earlier in the week, Theresa May said she would look at the option of extending the Brexit deadline beyond March 29th. This had caused the initially rally of the pound. Further Sterling strength on Wednesday had been boosted by May confirming that MPs will have the chance to vote on delaying Brexit beyond the current deadline.

On Wednesday evening, a series of concessions were voted on in Parliament as May steps up her Brexit strategy. The amendment put forward by Yvette Cooper of extending Article 50 was backed by parliament by a margin of 502 to 20. This amendment gives Theresa May's commitment on giving MPs a vote on delaying Brexit if both her deal and no-deal are rejected by MPs.

May has confirmed that this amendment will be put into action if she cannot get her deal through Parliament with a meaningful vote scheduled for 12 March. Furthermore, Labour will also will continue to fight as their proposal of a custom unions agreement was voted down in Parliament by 323 votes to 240. Labour will look at alternative options including another referendum and a general election as Corbyn went onto say ‘We will back a public vote in order to prevent a damaging Tory Brexit or a disastrous no deal outcome’.

Angela Merkel has also backed giving the U.K. more time to renegotiate the current Brexit deal beyond March 29th. She went onto say ‘’if the UK requires more time, we won't deny them that. But we are trying to come to an orderly solution to the UK's departure from the EU,". She also insisted that it isn’t an ideal situation but did go onto say it’s ‘reality’ and ‘we need to find a good solution’.

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08:30 - USD: Advance GDP Q/Q - forecast 2.6% from previous 3.4%