Sterling traders mull effects of May’s latest defeat
The pound edged higher yesterday as strong British retail sales lifted sentiment, though investors were considering the consequences of a Brexit vote defeat in parliament for Prime Minister Theresa May.
On a weekly basis, the British currency was set for its third consecutive drop. Analysts said the latest parliamentary loss for the UK government, although on a symbolic vote, indicates Ms May does not have the support of her MPs. With less than six weeks before the March 29 exit date, Ms May has stepped up efforts to convince the EU to grant her concessions.
“The constant Brexit can-kicking has also increased the risks of a disorderly exit,” strategists at BNP Paribas said in a daily note.
Ms May has promised that if the UK parliament has not approved a deal by February 26, she will make a statement updating MPs on her progress on that day and lawmakers will have an opportunity on February 27 to debate and vote on the way forward. The pound was set to end the week on a cheerful note as data showed British retail sales rebounded in January, shaking off some of the recent gloom over the UK economy as the Brexit departure date nears. After bouncing following the sales release, the pound held near the day’s high of $1.2839.
It performed even better against the euro, rising to 87.84 pence. The euro’s decline accounted for much of the move, though. The euro fell after an ECB board member said policymakers were discussing whether to issue new multi-year cheap loans to banks.
