Britain’s pound bounced from three-year lows on Wednesday after a parliamentary vote raised the prospect of another delay to Brexit.
An alliance of opposition lawmakers backed by 21 rebels from Johnson’s Conservative Party defeated the government on Tuesday on a motion allowing them to try to pass a law which would force a three-month extension to Britain’s EU exit date. British lawmakers defeated Boris Johnson on Tuesday in a bid to prevent him taking Britain out of the EU without a divorce agreement. Thus, this prompted the prime minister to demand an Oct. 15 snap election. On Wednesday they will seek to pass a law forcing Johnson to ask the EU to delay Brexit until Jan. 31 from Oct. 31. The alternative is to have an exit deal approved by parliament beforehand.
British Prime Minister Boris Johnson an Oct. 15 snap election after lawmakers seeking to prevent a no-deal Brexit. This move dealt him a humiliating defeat in parliament which he cast as an attempt to surrender to the EU.
Parliament’s move leaves Brexit up in the air. Possible outcomes ranging from a turbulent no-deal EU exit to abandoning the whole endeavour. Both outcomes would be unacceptable to swathes of the United Kingdom’s voters.
Pound bounced 0.9% to $1.2195, and against the euro it rallied 0.5% to 90.365 pence.
START TRADINGForex – Pound bounced on attempts to stop no-deal Brexit
The dollar index against a basket of six major currencies was last down 0.4% after rising overnight to 99.370, its highest level since May 2017. The greenback began its descent after data on Tuesday showed that manufacturing activity had contracted for the first time in three years last month.
The euro rebounded to $1.0987 after sliding to a 28-month low of $1.0926 overnight, boosted by the weaker dollar. Comments from European policymakers introduced doubt over the scale of an ECB stimulus package expected next week. The single currency gained as much as 0.5% to $1.1024.
The yen was down 0.2% at 106.19 yen per dollar. A Bank of Japan board member said the central bank must pre-emptively ease monetary policy to fend off risks to the economy.
The Swiss franc dropped 0.2% versus the euro to 1.0850 francs.
The greenback’s doldrums helped the Australian dollar shine. when June-quarter economic growth, while soft, was in line with forecasts, and the currency rose 0.3% to reach a one-week peak of $0.6775.
Oil prices rose, as the positive China data helped them recover from a nearly one-month low on fears over the weakening global economy. Brent crude was up 59 cents at $59.21 a barrel, while U.S. WTI futures gained 94 cents at $54.87 at barrel.
Gold prices dipped on Wednesday as investors booked profits after a 1% jump in the previous session. But concerns over the global economy kept bullion close to a six-year peak. Spot silver was up 0.5% at $19.32 per ounce, after hitting $19.57 earlier, its highest since September 2016.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money