UK: Political and parliamentary standoff over Brexit continues - Westpac

Tim Riddell, senior market strategist at Westpac, suggests that the UK’s political and parliamentary standoff over Brexit continues as the Brexit clock is ticking down towards the Article 50 end date of 29 March.

Key Quotes

“EU reluctance to reopen the “agreed” withdrawal plan around the Irish border may seem intransigent, but with UK Parliament unable to agree on its stance, this may be understandable for external investors. However, this impasse is heightening the risks of an unintended disorderly Brexit.”

“The latest attempts by cross-party backbenchers to propose a motion (on 14th) that would avert a no-deal and extend negotiations could reduce imminent economic risks. If it passes, GBP is likely to squeeze higher and it could perversely could even push pro-Brexit factions to back May’s plan with a key parliamentary Brexit vote now slated for 27 Feb.”

“GBP/USD is likely to become more volatile within its recent 1.2750-1.3250 range until a breakthrough or break down in negotiations occurs.”