Sterling nears three-month low as investors prepare for Brexit vote
Monday,
10-Dec-2018
03:41 PM (IST)
Sterling sank to a near three-month low against the euro on Monday as investors positioned for a parliamentary vote on Britain’s Brexit deal with the European Union that Prime Minister Theresa May is widely expected to lose. Easing some concern about Britain crashing out of the bloc in March without a deal, the EU’s top court ruled on Monday that the British government may unilaterally reverse its decision to leave. Traders are trying to predict how the pound - among the worst performing major currencies of 2018 - would react if May loses the vote and scenarios include a no-deal Brexit, a renegotiated deal and a second referendum. The currency traded flat against the dollar at $1.2721 and was down 0.3 percent against the euro at 89.88 pence, its lowest since Sep 24. Analysts are focussing on the number of votes May could win or lose by and what that could mean for her chances of re-negotiating a deal with the European Union. A narrow defeat for May - say by around 20-50 votes - is seen by investors as the most likely outcome and has the potential to cause short-term volatility for the pound. An emphatic defeat for May by a margin of around 100 votes would leave her withdrawal agreement in tatters and propel sterling into the unknown.
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