Breaking: Letwin amendment approved, GBP/USD negative, crunch Brexit vote due on Tuesday

Yohay Elam FXStreet

The House of Commons voted by 322 to 306 in favor of the Letwin amendment, which forces the government to ask for an extension. The defeat for the government creates uncertainty, which is harmful to the pound.

Prime Minister Boris Johnson has said that the Meaningful Vote has been voided of meaning. The focus now moves to the vote on the Withdrawal Bill due on Tuesday. He has said that he will not negotiate a delay with the EU.

Earlier, Michael Gove, who coordinates Brexit preparations, has confirmed that there will be no meaningful vote if the Letwin amendment passes.

Letwin amendment background

The Letwin amendment requires the government to ask for an extension to Brexit if the full Withdrawal Bill (WB) is not passed by parliament by the end of Saturday, October 19. Prime Minister Boris Johnson is said to boycott the "meaningful vote" on his Brexit deal and make a vote on the WB – probably on October 22 – the significant vote.

Passage of the amendment means further uncertainty may weigh on the pound when trading opens in Asia on Sunday night. GBP/USD.

A failure for the Letwin amendment opens the door to approving the deal and sending sterling higher. Support for the deal is rising, as hardliners are backing it.

More Brexit: Four scenarios and GBP/USD reactions as the deal reaches parliament

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.

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