CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Pound pulls back as Brexit bill left in limbo

09:37 23 October 2019

Summary:

  • Government pause WAB after defeat on timetable

  • EU expected to offer an extension

  • GBP dips but selling remains fairly contained 

 

Tuesday’s votes in UK parliament were pretty much in keeping with the consensus forecast as Boris Johnson chalked up his first victory in the House of Commons as MPs backed his Brexit deal. However, any joy for the PM was short lived as the failure to pass the program motion has effectively ruled out the chances of meeting his “do or die” pledge in delivering Brexit by October 31st.

Start investing today or test a free demo

Open account Try demo Download mobile app Download mobile app

The past week has been fairly mixed for the pound on the whole, with the largest drop seen against the antipodean currencies. Sterling has pulled back as the optimism that Boris’s deal would pass anytime soon has been checked, but the currency still remains not too far from recent peaks. Source: xStation 

 

The failure in the second vote of the evening means that the path of the bill has now been paused, residing in a state known as limbo. It is now up to the EU in deciding whether to offer an extension and for how long and Donald Tusk has wasted little time in suggesting a 3-month flextension which would move the deadline to January 31st but also allow for an earlier exit if the Withdrawal Agreement Bill could be ratified. There has been some suggestion that the EU27 members may not back such a move, with French president Macron seen as the most likely to object, but on balance this remains improbable and the base case now becomes an extension. 

 

US investment bank JP Morgan have claimed that if an extension is offered to PM Johnson he would probably succeed in passing his Withdrawal Agreement Bill. This may be a little presumptuous however, as there is a good chance that it received additional support last night due to the belief of several swing voters that the program motion would not pass and therefore they could afford to back it under the premise that it would not proceed anyhow.  

 

A general election looks a likely way out of the current stalemate, and although the Fixed Term Parliament Act requires a two-thirds majority to pass, a vote of no confidence would need just a simple majority and looks the more plausible path. 

 

The pound dipped lower in response to the latest events, although the selling has been fairly contained and with the prospects of a no-deal still remaining remote in the extreme, the case for a significant depreciation is fairly weak for the time being.

The GBPUSD rate may have turned lower in the short term, according to the H1 Ichimoku cloud. Fib retracements offer potential levels to look to below should the declines continue with the 23.6% at 1.2825 and the 38.2-41.4% region spanning 1.2683-1.2709. As for potential resistance the cloud itself around 1.2935 and recent highs of 1.3012 are levels to keep an eye on. Source: xStation  

 

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

Back
Xtb logo

Join over 935 000 investors from around the world

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
adobe_unique_id cc 1 March 2025
test_cookie cc 1 March 2024
SESSID cc 9 September 2022
__hssc cc 1 March 2024
__cf_bm cc 1 March 2024
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-22576382-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
AnalyticsSyncHistory cc 8 October 2022
af_id cc 31 March 2025
afUserId cc 1 March 2026
af_id cc 1 March 2026
AF_SYNC cc 8 March 2024
__hstc cc 28 August 2024
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
muc_ads cc 7 September 2024
lang
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 28 August 2024

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description
personalization_id cc 7 September 2024
UserMatchHistory cc 8 October 2022
bcookie cc 8 September 2023
lidc cc 9 September 2022
lang
bscookie cc 8 September 2023
li_gc cc 7 March 2023

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language