Sterling is one of the weakest currency this week, just next to risk aversion pressured commodity currencies. But downside in the Pound is so far limited, except versus Yen. It’s believed that odds are stacking against UK Prime Minister Theresa May winning the parliamentary vote on Brexit deal on December 11. Her performance in the first two days of the five-day parliamentary debate hasn’t been satisfactory so far.
According to a Reuters poll, economists forecast that Sterling would appreciate 3.5% if the deal is approved next week. On the other hand, rejection could trigger selloff by -2.75%. But we’d like to emphasize the eventual development if rather unimaginable. May’s defeat in the Brexit vote might not lead to no-deal Brexit, but no Brexit at all. After all, the UK has a trump card of withdrawing the Brexit request unilaterally.
Anyway, for now the Pound’s movement could be relatively limited as traders would refuse to commit to any position before the vote.
