Pound US dollar exchange rate: GBP slips against USD as MPs seize control of Brexit

Pound US dollar exchange rate: GBP slips against USD as MPs seize control of Brexit

It was confirmed on Monday that Prime Minister Theresa May’s withdrawal agreement will not be brought before the House of Commons for a third vote as it does not have enough support. Later in the evening, MPs voted to take control of the parliamentary timetable to attempt to find a majority for any Brexit option. MPs voted by 329 to 302. Sir Keir Starmer, Shadow Brexit Secretary, tweeted: “Another humiliating defeat for a prime minister who has lost complete control of her party, her cabinet and of the Brexit process.

“Parliament has fought back – and now has the chance to decide what happens next.”

This defeat could lead to a “soft” Brexit that keeps the UK closer to the European Union. 

Three government Ministers, Alistair Burt, Richard Harrington and Steve Brine resigned after they voted against the government.

Meanwhile, fear engulfed global markets on Monday in the wake of an inversion in the US Treasury yield curve.

In the past this has signaled a US recession.

However, these concerns have since eased slightly.  

Masafumi Yamamoto, Chief Forex Strategist at Mizuho Securities in Tokyo, said: “The dollar has tracked US yields.

But the trend may have run its course, with little further downside seemingly remaining for yields.

“The decline by US equities has also slowed, and this has supported the dollar as it shows that the market’s economic prospects remain reasonably good with the Fed preparing to take a more dovish approach.”

Looking ahead to this afternoon, the US dollar could make further gains on Sterling if US consumer confidence and housing data impresses. 

Brexit is also going to remain one of the main catalysts for pound US dollar movement, as tomorrow MPs are set to vote on alternatives to Mrs May’s deal. 

These options are likely to include staying in the EU customs union, holding a second referendum, no-deal and revoking Article 50.

Sterling could rally if options such as revoking Article 50 gain a lot of support in the House of Commons.  

Published at Tue, 26 Mar 2019 11:52:00 +0000