GBP/USD: pound is growing on rumors and prepares for the EU summit


After several days of decline, the British currency sharply jumped at Wednesday morning trading. The reason for what happened was the news that several Conservatives may refuse to support the exit without a deal. The pound was later supported by reports that the EU was ready to make concessions on the Irish border.

However, the latest news was quickly denied in the EU and in the ranks of the Democratic Unionist Party of Northern Ireland. As a result, the pound descended from heaven to earth, ending yesterday near the $1.22 mark.

Today, the British currency was able to somewhat recover the losses amid the publication of a report on national GDP. In June-August, the indicator increased by 0.3% compared with the previous three-month period.

Apparently, the quotes have not yet laid out the scenario for Britain to exit the EU without a deal. Investors still believe that the parties will conclude an agreement at the last moment, and any signals that this is possible serve as a driver pushing the pound up.

According to representatives of the government's office and MPs, the House of Commons will hold an emergency meeting on October 19, which will take place immediately after the end of the EU summit and on the day when, according to the law adopted in September, UK Prime Minister Boris Johnson will have to submit to the legislators a "divorce" agreement agreed upon with Brussels.

Most likely, MPs will try to influence the prime minister so that he asks the EU to postpone the country's withdrawal from the EU, and take away from the government the right to determine the agenda of the chamber. In turn, Johnson can vote on the choice between deferring Brexit and leaving the EU without an agreement.

However, what issues will be considered at the emergency meeting and how it will end, no one undertakes to predict now. It is possible that on this day the fate of Brexit and B. Johnson himself as a prime minister may be decided.

The material has been provided by InstaForex Company -