Boris Johnson’s Brexit battle drags on in UK Parliament
British PM Boris Johnson faced another day of opposition in the House of Commons on Monday, as he attempted to get his new Brexit deal approved by lawmakers inside UK Parliament. The atmosphere remained tense after MP’s voted-down his new Brexit proposal over the weekend, placing PM Johnson in a precarious position ahead of the United Kingdom’s planned departure from the EU on October 31st.
Over the weekend PM Johnson was forced to write a request to the European Union, asking them to extend the United Kingdom’s departure date from the EU. The Benn act required the British PM to do this by law, although Boris Johnson also wrote a separate letter to the European Union stating the reasons why they should not grant an extension.
Going forward, it is still possible that the United Kingdom could leave the European Union on October 31st if all twenty-seven EU members fail to agree on a Brexit extension. It is also worth noting that the UK is expected to be granted an extension of around three months.
From a tactical point of view, Boris Johnson may be hoping that if the European Union is unable to agree to his Brexit extension request this week, it will put pressure on UK lawmakers to accept the new Brexit deal. With just days until the United Kingdom’s exit date from European Union time is running out to put his new Brexit bill into legislation.
The market reaction to the events over the weekend have been muted, as market participants remained confident that a hard-Brexit scenario can still be avoided. Volatility in the British pound currency may start to stabilize somewhat if all European Union members agree to Brexit extension, which would allow further time debate the current or new Withdrawl Agreement.
EUR/GBP Daily Candlestick Chart | Source: ActivTrader
The EUR/GBP pair could see some fireworks this week, with the European Central Bank meeting alongside the latest Brexit developments. The focus should remain on the downside while price trades below the 0.8650 level. Bearish targets for the EUR/GBP pair extend down towards the 0.8470 and 0.8300 level.
Written by Nathan Batchelor, External Analyst, ActivTrades
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