Brexit – the Big Day is Finally Here
Skerdian Meta • 2 min read
Finally we come to an end with this saga that has been haunting forex traders for two years now, or so it seems. The British Parliament will vote today on Theresa May’s Brexit deal that she reached with the EU last month. She pulled it back at the last minute in December before being voted off, to go and get some legal assurance from the EU, so here it comes now.
She didn’t get any legal assurance from the EU, but she received a letter which the Government released yesterday. Apparently, the EU said in the letter that they’re not in a position to agree to anything that changes withdrawal agreement in Brexit backstop letter. EU is committed to speedy work on the trade deal by December 2020 to avoid triggering Irish backstop and that even if triggered, backstop would only be temporary and last until a better agreement is found.
So, no legal assurances there, just some warm words. It is really difficult for the deal to pass the Parliament, to be honest, but in case it does, I see a relief rally in the GBP at first and then, after some cooling off, I see an uptrend for days to come.
Things will get more complicated if the deal is voted off. The GBP will decline initially but after that, confusion is bound to follow because:
- The UK will likely head out without a deal
- Article 50 might be postponed
- The UK might hold another Brexit referendum
We heard the opposition leader Jeremy Corbyn say that the Labour Party will push for new general elections in case Brexit deal fails, instead of asking May to resign. If that happens, then Labour will likely ask for another Brexit referendum. That would be really bullish for the GBP, but nothing is sure right now. Let’s see how this goes step by step.