(05 DECEMBER 2018)DAILY MARKET BRIEF 2:Pound pounded by Brexit chaos

Ahead of next Tuesday’s vote on Brexit, we expect the British pound to remain under pressure and highly sensitive to headlines. Short-term, we expect EUR/GBP, currently trading at 0.8906, to head along 0.8889.

Parliamentary debate has intensified. Support for Prime Minister May is weakening. An amendment was passed that gives Parliament the final decision over Plan B, should May’s draft agreement be rejected. Most MPs are unwilling to leave the European Union without a deal, but if May’s plan is rejected, time will be short for alternatives. Now on the table are proposals to delay Brexit or even to reverse it. Even insiders are unsure how this will play out.