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Last week, the European Union gave Britain a couple more weeks so that the country could avoid withdrawing from the alliance without entering into any agreement.
But will London have enough time to break the deadlock and provide a "soft" Brexit?
Today, the GBP/USD pair is trading near the 1.32 mark in anticipation of the next Brexit vote to be held in the British Parliament in the coming days.
Recall that the EU leaders rejected London's request to postpone the United Kingdom's withdrawal from the bloc to June 30, declaring its readiness to provide a reprieve until May 22 but in a condition that the divorce agreement will be approved by deputies of the House of Commons this week. However, if the deal fails, an emergency EU summit will be convened, where Britain will have to state their further actions, which means that the country will either leave the EU without a deal or a longer Brexit delay will be required.
In turn, Theresa May noted that she would not become the prime minister in which the UK's withdrawal from the EU would be postponed for a long time, which suggests the possible resignation of the head of the cabinet in the absence of ratification of the deal until April 12.
According to British media, May's resignation is only a matter of time and the options now range from immediately replacing her with some of the ministers to leaving her post after a couple of months.
Of course, the United Kingdom may still withdraw its application for withdrawal from the alliance. Thus, the online petition to cancel Brexit has already gained more than 5 million signatures but it still has a much smaller weight than the 18 million votes cast three years ago for the country to leave the EU.
Thus, the upcoming week promises to be tense for the British currency.
The downside risks for the pound are the implementation of the "hard" scenario and the holding of early parliamentary elections.
However, if parliament takes control of Brexit from the government and the majority of the House of Commons deputies advocate for a repeat referendum, this will lead to an increase in the pound.
According to analysts, one of the original decisions is for the legislators to adopt the draft divorce agreement, provided that it is approved by the citizens of the country in a new referendum and three questions are to be raised concerning the vote, either to accept the deal, remain in the EU or leave without deal.
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