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Pound Edges Up Even After May’s Brexit Deal Suffers Another Defeat

2019-3-13 13:58:01Basics of Trading
Pound Edges Up Even After May’s Brexit Deal Suffers Another Defeat

The British Pound edged up on Wednesday in Asia even after U.K. Prime Minister Theresa May’s Brexit deal suffered another defeat in Parliament.

The defeat brought fresh uncertainties and dealt a further blow to the chances of an orderly Brexit.

The GBP/USD pair stabilised on Wednesday despite the news, after losing about 0.7% the previous day. The pair last traded at 1.3083 by 11:41 PM ET (03:41 GMT), up 0.1%.

Joseph Capurso, senior currency strategist at the Commonwealth Bank of Australia, wrote in a Wednesday morning note that if U.K. lawmakers voted to leave the European Union without a deal, the pound could fall as much as 4 to 8%.

Lawmakers are set to vote again this week to decide on a “no-deal” exit plan, or whether to extend the March 29 departure date.

"The Parliament is likely to reject a 'no-deal Brexit' plan, and the March 29 exit date subsequently being extended now looks to be a distinct possibility,” said Takuya Kanda, general manager at Gaitame.Com Research Institute, in a Reuters report.

Meanwhile, the AUD/USD pair extended losses after both the National Bank of Australia (NAB)’s business conditions and business confidence index for February missed estimates.

The U.S. dollar index that tracks the greenback against a basket of other currencies edged up 0.1% to 96.968. The dollar traded lower on Tuesday as tame U.S. inflation data affirmed expectations the Federal Reserve will continue to hold off raising interest rates.

The USD/CNY pair was up 0.1% to 6.7094. The People's Bank of China (PBOC) set the yuan reference rate at 6.7114 vs the previous day's fix of 6.7128.

The USD/JPY pair slipped 0.1% to 111.27.