Forex - Sterling Sinks on Reports that Brexit Vote Being Pulled
Published Dec 10, 2018 07:35AM ET
Investing.com - The pound sank on Monday following reports that British Prime Minister Theresa May would cancel Tuesday’s planned vote on whether to approve her Brexit withdrawal deal in order to avoid a defeat that could potentially bring down her government.
GBP/USD hit lows of 1.2651, the weakest level in one-and-a-half years and was at 1.2653 by 07:33 AM ET (12:33 GMT), down 0.76%.
The pound also hit three month lows against the euro, with EUR/GBP advancing 0.89% to 0.9021.
Bloomberg reported that May plans to call off the vote on whether to approve the Brexit withdrawal deal that she negotiated with Brussels following repeated warnings from lawmakers that the scale of the expected defeat could bring down her government.
May convened a conference call with senior ministers on Monday to discuss what do with her compromise deal that allowed the UK to exit while staying in the EU's orbit.
The government was expected to make a formal announcement on plans for the vote later in the day.
The EU executive said Monday it would not renegotiate the terms of its Brexit agreement.
"We have an agreement on the table," a spokeswoman for the European Commission told reporters, recalling a position expressed by President Jean-Claude Juncker. "We will not renegotiate.”
She added that "the bloc was ready for "all scenarios".
If the vote on the Brexit deals fails to pass, as widely expected, multiple possibilities will be thrown open, including the chance of a second referendum.
The UK could be on course to leave the EU without a deal or May could be forced to resign and the UK might need a general election or a second referendum to resolve the crisis.
Earlier in the day, the European Court of Justice ruled that Britain can unilaterally revoke Brexit if it wishes to do so.
May has pledged to give parliament a vote on whether to accept or reject the agreement before the UK exits the bloc on March 29.
-- Reuters contributed to this report
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Written By: Investing.com
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