The uncertainty surrounding the British pound was noticeable during the early hours of Wednesday’s trading on the stock exchanges in Asia. But the value picked up in the subsequent hours, and in the morning the British currency looked to stand. Then the decline of 7 cents was measured against the dollar rate, compared with the pound’s value Tuesday night.
The British pound swung both before and after Prime Minister Theresa Mays divorce agreement with the EU was rejected in the House of Commons. On Wednesday, a motion of censure against May and her government will be voted on.
It is expected that May will survive the voting that Labor is behind, and then the market will begin to look ahead, analysts point out. May may ask to postpone the date of EU exit from March 29 until further notice in an attempt to make a better deal with the EU, they believe. Furthermore, there is increasing speculation about the prospects for new elections and possibly also a new referendum.
– We see a shift away from the harder brexit exit and in the direction of a number of opportunities that go from postponement to new referendum. It supports the pound, says Gavin Friend at National Australia Bank.