British pound fluctuating as uncertainty about Brexit continues

The pound has been bouncing up and down this week

On Tuesday, markets rallied after an agreement by the opposition parties to stop no deal Brexit via parliamentary legislation and as a result pound briefly surged almost up to 1 GBP per 1, 23 USD.

However, on Wednesday pound has entered a freefall after BBC reported that sources inside the government have said that Prime Minister Boris Johnson may request a suspension of parliament. Should the Queen accept this advice (according to British constitutional custom, the monarch always accepts such requests) then the parliament will play no further role in Brexit.

This action would undoubtedly strengthen the Prime ministers position, but its effect on the like hood of no deal Brexit is more complicated. On one hand, with parliament out of the way, it is less likely that Britain will back down and accept the withdrawal agreement. On the other, perhaps EU will be more amenable to compromise due to this factor.

Markets will get more nervous the more likely no deal Brexit becomes and as such, should the parliament get suspended, another fall can be expected.


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