Sterling trade turns cautious ahead of parliamentary votes on Brexit

Investors said in the short term it would be best to be cautious on the pound. — Reuters pic
Investors said in the short term it would be best to be cautious on the pound. — Reuters pic

LONDON, Jan 28 — The pound slipped today after posting its biggest weekly rise in more than 15 months last week as investors took profits before crucial votes in the British parliament that will aim to break the Brexit deadlock.

With less than two months to go before the United Kingdom leaves the European Union, lawmakers have set up a series of votes in parliament on Tuesday through which parliament and the government will try to find a way forward.

But some investors say that even if there is a broad agreement on extending the date of Britain’s exit from the EU beyond March 29, it would fail to fuel further gains in the currency.

“In the very short term, we would be cautious on the pound as none of the amendments tomorrow are legally binding unless the government prepares to shift its red lines, and we haven’t seen anything yet,” said Timothy Graf, head of macro strategy at SSGA in London.

On Monday, the currency edged 0.4 per cent lower to US$1.3149 (RM5.4) in early trading. Against the euro, it weakened by a similar amount to 86.80 pence.

British Prime Minister Theresa May intends to give parliament a second chance to approve a Brexit deal as soon as possible, her spokesman said on Monday, adding that negotiations to change the deal so that it can win lawmakers’ support were continuing. (Reporting by Saikat Chatterjee; Editing by Toby Chopra and Gareth Jones)

Source: The Malay Mail Online

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