During the conference in Hague, German Chancellor Angela Merkel said that the EU would find a backstop solution by October 31 (Brexit deadline).
UK pound pares gains as cabinet denies Brexit date might be delayed
The British pound managed to head north to the highest value since November. Britain’s currency just reacted to a report that Brexit could be postponed beyond the March deadline, just before paring profits because the UK cabinet ruled out an extension.
As a matter of fact, the British pound tacked on by up to 0.8% right after the Evening Standard newspaper referred to unidentified cabinet ministers telling that a delay to the March 29 Brexit deadline was highly probable. However, after that the UK currency rebounded due to the fact that a spokeswoman for Prime Minister Theresa May told it wasn’t government policy to have Article 50 extended.
It’s apparent that the size of the move clearly shows that the market is all geared up towards jumping on good news, as some financial analysts pointed out.
May’s Brexit deal is generally anticipated to be rejected by Britain’s legislative body in a vote on Tuesday.
As some analysts pointed out, there’s still an overhang of pound short trading positions. In the event of more upbeat developments the squeeze could be brutal and push the major British currency back to levels last observed in the first half of the previous year.
In London, by 11:23 a.m. the UK currency managed to head north by up to 0.4% ending up with an outcome of at $1.2794, having leapt to $1.2851, which is the highest value since November 26. The British pound is actually heading for a fourth weekly jump, which appears to be its best run in almost a year, after a devastating tumble in 2018, which it went down by 5% versus the evergreen buck on worries of the United Kingdom crashing out of the European bloc even without a deal.
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Welcome to Tuesday, people! Here’s your markets update ahead of the European trading session.