GBP Keeps Rallying Higher but Brexit is Where it was a Week Ago
GBP is surging after the UK parliament voted to take things on their hands yesterday, but no backstop solution still means no deal Brexit
The GBP turned really bearish in the last week as it seemed that the UK was heading towards Brexit with no deal in sight. But, the UK Parliament voted to take control yesterday and they will likely pass a bill for another extension to the Brexit deadline, probably until the end of January next year.
Although, they have to turn it into a law before Boris Johnson prorogues the parliament next week. Otherwise, there won’t be much time to stop a no deal Brexit. On the other hand, the EU is standing firm. The European Commission made a few comments:
- Nothing has changed after UK parliamentary vote
- Brexit deal must be on the basis of the withdrawal agreement
- Boris Johnson remains the contact person in the UK
Nonetheless, GBP/USD has broken above 1.22 just now. But, this might be a good chance to look for a place to go short on the GBP because, extension or not, the main issue which is the Irish backstop has no solution to be found, so we are where we were all this time – no backstop solution, no deal Brexit.
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