(14 FEBRUARY 2019)DAILY MARKET BRIEF 1:GBP under Brexit pressure

Brexit deadlock remains. Will Prime Minister Theresa May maintain political support and win concessions from the EU? We’ll see at the next vote, scheduled for 27 February. We expect GBP/USD to decline further as Brexit fatigue weighs on traders. Currently trading at 1.2834, GBP/USD is heading along 1.2810 short-term.

Following fruitless negotiations with EU President of the Commission Juncker and EU President Tusk in Brussels, May faces resentment from lawmakers, who are concerned about the upcoming decision: either back May’s deal, vote for a “long” extension of Article 50 and try to get a better deal, or reverse the exit decision (i.e. second referendum, unilateral withdrawal of Article 50). Today’s government motion will ignore a no-deal scenario, a move that could threaten May’s leadership in the Conservative party. Once again, she risks a no-confidence. Still, today’s Parliament session will not be a game changer – that will likely come in two weeks.