Australia Markets close in 5 hrs 5 mins

Pound Pushes Higher on Hopes 'No-Deal' Brexit Will Be Ruled Out

Investing.com -- The British pound is higher against the dollar and euro in early trading in Europe Wednesday, as the market leans on balance towards believing that Brexit will be softened, delayed or even cancelled.

The U.K. parliament rejected the government’s deal on leaving the European Union for a second time on Tuesday, effectively killing it as the EU has said it isn’t prepared to negotiate any more on the terms of leaving.

At 03:00 AM ET (0800 GMT), the pound was at $1.3142, up from around $1.3060 immediately after the vote, while EURGBP was lower at 0.8584.

The dollar index, which measures the value of the greenback against a basket of six major currencies, was at 96.94, practically unchanged.

The House of Commons is due to vote later Wednesday on whether to leave the EU without a deal on March 29, an option that has never commanded a majority and is highly unlikely to do so now.

Assuming that the motion on leaving without a deal is also defeated, the House will vote Thursday on asking the EU for a delay to the March 29 deadline. However, that’s not something the EU wants to do unless it can see a clear reason for doing so. What is not - at least yet - on parliament's timetable - is a motion calling for either a general election or a second referendum that could overturn the result of the first one.

As such, the risk of an accidental “no-deal Brexit” still alive, as EU negotiator Michel Barnier pointed out via

“The EU has done everything it can to help get the Withdrawal Agreement over the line. The impasse can only be solved in the #UK," Barnier said. “Our “no-deal” preparations are now more important than ever before.”

Overnight, the dollar had wobbled after reports citing U.S. Trade Representative Robert Lighthizer as saying that raising tariffs on Chinese imports is still an option, given the lack of decisive progress in trade talks between the two countries. The remarks hit both the trade-sensitive Aussie and Kiwi, as did a weaker-than-expected Australian consumer confidence survey.

Related Articles

Forex - Dollar Flat as Slump in Sterling Limits Downside

Forex - U.S. Dollar Falls to 2-1/2 Week Low

Fidelity’s Wolf Sees Loonie Testing 62-Cent Low Amid Slowing Economy