Following a vote of no confidence, Theresa May retained her post as British Prime Minister. On Monday, January 21, she will present the so-called plan "B" for Brexit, which should arrange parliamentarians.
The pound is in conditions of high volatility and uncertainty, there are rumors in the markets that the exit date from the European Union may be postponed to a later date.
As for the plan "B", then the currency strategists, investors sneaked doubt that it will be possible to prepare it in such a short time. It took 18 months for Team May to negotiate a deal in its current form. There is a possibility that it will not be radically different from the rejected version. In addition, the EU is unlikely to give up its position.
In addition to the plan "B", there is also a backup plan "B". We are talking about possible interparty support for changing current conditions. After the vote, Theresa May made an appeal, with which she calmed down the heated participants of the market a little, saying that she would not "drag out" the time before the release date from the EU. Probably, she wants to enlist inter-party support for working on an agreement with the EU.
This development will be positive for the markets and should support the sterling. Everything is good, but the 230 parliamentarians who speak out against it worsen the situation. The House will probably have to completely revise the deal. In the coming days, the picture should become clearer.
Meanwhile, HSBC currency analysts advise buying a pound against the US dollar based on the good news on Brexit. In their opinion, we can expect a soft exit from the group. It is possible that the UK will remain in the European Union.
Soft Brexit contributes to the rise of sterling to $ 1.37, if the country remains in the EU, the rate will break through $ 1.55.
An unfavorable scenario also takes place. So, a hard Brexit will provoke the collapse of the GBP / USD pair to $ 1.10, strategists predict.
"Anything can happen. The abolition of Brexit, the new referendum or the prolongation of the transition period. In order to calculate the "fair" rate of the pound against the dollar, it is necessary to estimate the probability of each of these events. We recommend buying a pair based on the good news," representatives of HSBC told Bloomberg TV in an interview.
The material has been provided by InstaForex Company - www.instaforex.com