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LONDON (Reuters) – The pound sterling strengthened on Friday when Prime Minister Theresa May asked the European Union to defer Brexit until the end of June, but its Shy attempts reflected the persistent malaise of investors.
FILE PHOTO: Sterling banknotes are seen in a counter at the Money Service Austria headquarters in Vienna, Austria on November 16, 2017. REUTERS / Leonhard Foeger
May on Friday wrote to European Council President Donald Tusk asking to postpone the departure of Britain until June 30, to allow divided British legislators to agree on a withdrawal agreement.
The United Kingdom's exit from the EU, which has been going on for almost three years, is now in doubt because the British Parliament can not decide what exit conditions it wants.
The impact of a long Brexit delay on the pound sterling is not clear. The pound sterling would win if a delay brought Eurosceptic lawmakers to support the deal negotiated in May with the EU or to bring about a reversal of the 2016 Brexit referendum.
On Friday, the pound remained close to $ 1.31 – the middle of the trading range for most of March – and traders said the path to any resolution remained bleak.
"We are in favor of a tortuous deal that would lead to a potential pound gain, with 1.2950 / 3000 USD remaining the lower end of Cable's short-term range," said ING badysts.
Adding to uncertainty, France said it considered premature talks granting another extension to Britain.
UBS Global Wealth Management said it was considering a lengthy Brexit extension, saying May's attempt to reach a multi-party consensus would succeed and hoped the pound would remain volatile.
May argues with opposition lawmakers to build consensus among parties to break the stalemate over Brexit, but Labor leader Jeremy Corbyn said she was not there. not advanced far enough in the first round of talks.
This week's developments also pushed up the expected volatility indicators for the pound sterling, with implicit monthly indicators being high against the euro.
Chart: World exchange rates in 2019 (tmsnrt.rs/2egbfVh)
Chart: Pound Sterling Fellowships Since Brexit Vote (tmsnrt.rs/2hwV9Hv)
Report by Tom Finn, edited by Larry King
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