Breaking: GBP/USD crashes as May may pull Brexit vote, uncertainty looms, to address Parliament at 15:30 GMT
Various British media outlets confirm the rumors that Prime Minister Theresa May will pull the crucial vote on her Brexit deal. She will reportedly make a statement to the House of Commons at 15:30 GMT.
In addition to the special address by the PM, the minister responsible for notifying Parliament, Andrea Leadsom, will also make an extraordinary statement. Until recently, officials insisted that the vote will go through. Irish PM Leo Varadkar said that he spoke with May earlier in the day. He said that the deal is the only one on the table. The UK may try to renegotiate the agreement, but resistance from Ireland and the rest of the EU will likely be fierce.
A high level of uncertainty about the next steps looms large on markets. Other options are another referendum, general elections, or reverse of Brexit. The European Court of Justice (ECJ) said she ruled that the UK can unilaterally revoke Article 50, thus reversing Brexit.
GBP/USD hit a new low at 1.2650 at the time of writing, the lowest since June 2017. Support is seen at 1.2590 with 1.2500 next down the line. Resistance awaits at 1.2700. Sterling also stumbled against the Euro, with EUR/GBP topping 0.90. GBP/JPY also fell sharply.
Update: the drops extend below 1.2650.
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In recent days it became clear that the government does not have a majority and analysts differed on the margin of the defeat. A loss with a minority of around 50 MP's was considered respectable while one closer to 100 was deemed to be humiliating. Some had speculated that May would tender her resignation.
Analysis: GBP/USD Forecast: Sterling falls to new 2018 lows as EU refuses Brexit deal renegotiation
Author
Yohay Elam
FXStreet
Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.
