Brexit delayed, sterling steady

The EU and Britain made a great progress. Deadline of Brexit was postponed until the end of January next year.

The main reason is to provide sufficient time for ratification of the divorce agreement in the British Parliament and secondly, to make enough space to arrange potential early elections. If Britain approves the deal earlier, departure date may be moved to sooner date.

Moreover, the delay is now making enough space for Bank of England (BoE) to consider further action. Long-lasting uncertainty about Brexit deal has put a great pressure on British economy and negatively influenced investors’ and consumers’ confidence. Now, when the no-deal Brexit possibility is eliminated, BoE is not expected to use all ammunition, but a slight rate move is probable, specifically cut of the lending rate.

Now, the pound appreciated slightly, and GBP/EUR is oscillating around 1.1567. The pound also slightly strengthened against the US dollar and GBP/USD pair is higher on 1.2839.


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