UK Prime Minister has officially sent a letter to ask for Brexit to be delayed. European Council President Donald Tusk has confirmed receiving the request and confirmed the two men have spoken on the phone.
Johnson was forced to send the letter to comply with the Benn Act – which stated that the PM must do so if a parliament fails to instruct otherwise by the end of October 19. Earlier on Saturday, MPs voted in favor of an amendment which forced the PM to do so if all the legislation has not passed. Following the announcement of the vote on the "Letwin amendment, the special session of parliament was cut short, delaying the Meaningful Vote on the Brexit deal to early in the week.
Johnson was reluctant to delay Brexit and did not sign the letter. Nevertheless, he complied with the law and broke his pledge not to ask for an extension. EU sources have told reporters that the lack of the signature is meaningless, and they will consider delaying Brexit.
The implementation of the Benn Act – which was intended to prevent the UK leaving the EU without a deal – is positive for the pound. The House of Commons still has time to approve the Brexit agreement and pass all relevant legislation before October 31 – thus leaving with a deal. In case it is voted down, the bloc will likely agree to postpone Brexit.
Overall, avoiding a cliff-edge Brexit may push GBP/USD higher early in the week. Cable closed at 1.2973 on Friday, near the five-month high of 1.2989.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.