The Pound Sterling was trading higher against the Dollar and Euro on Wednesday after an initial knee jerk reaction to the rejection of Brexit-related amendments in the UK Parliament yesterday. There is still some widespread belief that the government will be able to avoid withdrawing from the EU without having a trade agreement in place. UK lawmakers will demand that Theresa May sit down at the table with EU lawmakers and renegotiate the Brexit terms. FX traders were relieved that an amendment which called for avoiding a no-deal Brexit was approved, however.
As reported at 11:42 am (GMT) in London, the GBP/USD was trading at $1.3098, up 0.1407% and off the session peak of $1.3122 while the low is at $1.3062. The EUR/GBP was trading at 0.8726 Pence, down 0.18%; the pair has ranged from 0.87145 Pence to 0.87540 Pence in today's session.
Brexit Still Dominates Sentiment
While it is expected that the opposition leader will push for the withdrawal of a hard-no deal departure, there is still growing hope that the Article 50 deadline will be extended if a deal is not carved out before then. Currency analysts are generally in agreement that a Brexit delay is an inevitability, and given that, there is now growing expectations that the Bank of England may not now push ahead with previously expected rate increases. There is the sense that the BoE would rather halt its tightening plans now and wait and see where the economy goes since there is no clarity yet with the Brexit.