Sterling dropped sharply overnight after Prime Minister Theresa May suffered unexpected defeat on one amendment on the Brexit Trade Bill in the parliament. That amendment requires the government to take “all necessary steps” to join the European medicines regulatory framework. The Pound the stabilized after May narrowly defended the main amendment to the trade bill by 307 to 301 votes. That amended required the government to negotiate a customs union arrangement with EU if by January 21, 2019, it failed to negotiate a deal of frictionless trade for goods.
Sterling is holding above 1.3048 against Dollar for the momentum while EUR/GBP’s breach of 0.8901 was, so far, weak. At least for now, May’s position is still safe and she’s avoided a confidence vote. Nevertheless, the tight voting of Monday and Tuesday showed how divided the pro- and anti-EU camps are and it’s like an impossible task to bridge between them. A confidence vote on May could happen any time should she slip.
