The pound lost 0.3% to $1.3167 before steadying near $1.32 as Britain’s parliament ahead of a series of Brexit votes.
Parliament has taken control of the Brexit process from Prime Minister Theresa May for a day. The lawmakers will vote on the Brexit options as they look for options to break its deadlock.
Options include stopping Brexit to a new customs union to Prime Minister Theresa May’s existing deal still in the mix. However, markets doubt there will be a conclusion today and the full process of finding an advisory plan could run through Monday.
As the United Kingdom’s three-year Brexit crisis spins towards its finale, it is still uncertain how, when or even if it will leave the EU. May hopes to bring her deal back to parliament later this week.
Still, on a weekly basis, the British currency was slightly firmer indicating that the recent events in the Brexit process have been welcomed with some cautious optimism though the risks of more political uncertainty have capped gains.
In a sign of how nervous the currency markets have become, expectations of how much the currency would move in the coming weeks have climbed faster than bets on how volatile the pound will be over a year.
START TRADINGForex – Brexit votes lifts pound by 0.25% to 1.3245$
Major currency markets were quiet elsewhere as risk appetite remained fragile after a selloff last week triggered by fears of slowing global growth.
The U.S. Federal Reserve abruptly ended three years of monetary policy tightening last week amid signs of an economic slowdown. The European Central Bank, Reserve Bank of Australia and the Bank of Japan have all turned dovish since.
The dollar gave up earlier gains but held firm after U.S. government bond yields bounced off recent lows. Against a basket of currencies, the dollar index was flat at 96.736.
The New Zealand dollar fell on Wednesday after the central bank flagged a possible cut in interest rates, becoming the latest to turn dovish in the face of slowing global growth. The kiwi fell as much as 1.6% to $0.6794 after the RBNZ left rates unchanged and said its next move would probably be lower.
The Australian dollar also weakened to $0.7103, dropping half a percent.
The euro rose to $1.12758. ECB President Mario Draghi said on Wednesday that policymakers could delay an interest rate increase again if necessary.
The Japanese yen rose 0.3 percent, trading at 110.31 yen per dollar.
Sources: Reuters, Investing, CNN money
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