Pound struggles to recover amid Brexit extension vote uncertainty

The pound versus the US dollar (GBPUSD=X) ticked up slightly in early morning trading after prime minister Theresa May confirmed that the European Union has agreed to postpone Brexit beyond 29 March.

But there is still great uncertainty around the next two months. Members of Parliament (MPs) need to approve her Brexit deal, which will be put to a vote next week. She has tried to pass twice before and both were voted down by large margins. If they approve her deal, EU leaders offered to delay Brexit until 22 May.

However, if they don’t approve it, then the Brexit delay will only be until 12 April. That means Britain could still crash out of the EU without a deal.

That uncertainty has meant the pound against the dollar is still failing to truly recover.

“If Parliament does not agree a deal next week, the EU Council will extend Article 50 until 12 April. At this point we would either leave with no deal, or put forward an alternative plan,” said May in a statement.

“If this involved a further extension it would mean participation in the European Parliamentary elections. As I have said previously, I believe strongly that it would be wrong to ask people in the UK to participate in these elections three years after voting to leave the EU.

“I know MPs on all sides of the debate have passionate views, and I respect those different positions. Last night I expressed my frustration. I know that MPs are frustrated too. They have difficult jobs to do. I hope we can all agree, we are now at the moment of decision. I will make every effort to ensure that we are able to leave with a deal and move our country forward.”