Brexit Madness: British Pound Hits New Highs

BRexitBoth of Britain’s major parties are now in total disarray over Brexit, which is still legally set to happen next month on 29th March unless the British Government and the European Union agree otherwise. Paradoxically, this has boosted the relative value of Britain’s currency.

Today, the British Prime Minister promised that if the next vote on her agreed deal with the European Union, which will apparently be held around the 12th of March, fails to pass, then Parliament will be allowed votes on “ruling out no deal” (whatever that means, more on that later) and on postponing the departure date.

It seems very likely that the European Union will refuse any further concessions which would allow May to get a deal through Parliament: why would they, when they can try to stop Brexit from happening anyway and make certain to intimidate any other member state considering making a break for freedom in the future? Then Parliament can vote to “rule out no deal” which logically means accepting whatever deal the European Union will offer or stealing the referendum result from 2016, and then “postponing” the departure date. This begs the question: if more than two and a half years isn’t long enough to make Brexit happen, how much longer is required?

On the other hand, we have the Labour Party, which has been rocked by nine recent departures by its elected members of Parliament, primarily due to their unhappiness that their Party refuses to stand against Brexit. The Party has just adopted a confusing new policy on Brexit which nobody understands, and its two senior officials with responsibility for Brexit are contradicting each other and the Party’s new policy, which is incredible, but there it is.

What it all means in a nutshell: Brexit is less likely to happen at all, and no deal is extremely unlikely to happen as I have been saying for a long while, which has pushed the price of the British Pound up to a new four-month high against the U.S. Dollar and a new 9-month high against the Euro. Expect this move to continue in fits and starts if the theft of the 2016 referendum vote to leave the European Union gets closer to victory.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment. Learn more from Adam in his free lessons at FX Academy.