Sterling bounces back against euro and dollar ahead of today’s Brexit vote

THE pound has jumped this morning against the dollar and euro ahead of today’s vote on Boris Johnson’s Brexit deal. Sterling had slipped when trading opened at 7am by 0.6 percent against the dollar to $1.29 and by 0.4 per cent against the euro to €1.15. But a few hours later, the pound bounced back […]

THE pound has jumped this morning against the dollar and euro ahead of today’s vote on Boris Johnson’s Brexit deal.

Sterling had slipped when trading opened at 7am by 0.6 percent against the dollar to $1.29 and by 0.4 per cent against the euro to €1.15.

But a few hours later, the pound bounced back to $1.3 to the dollar – a five month high – and €1.16 to the euro.

It means that if you changed up £100 of your holiday money today you’d get $130 and €116.

Today, MPs will vote on the Prime Minister’s proposed Brexit deal.

On Saturday, MPs voted for the Letwin Amendment, put forward by Tory rebel Sir Oliver Letwin, to withhold approval for Boris Johnson’s deal until Parliament has passed the necessary law to enact the agreement.

This then triggered the Benn Act, which required the Prime Minister to write a letter to the EU seeking a three-month extension.

Mr Johnson didn’t sign the letter but instead included a second note sent to Donald Tusk, President of the European Council, stating he personally is not asking for an extension – and signed it at the bottom.

It effectively kicks the can down the road on Brexit until the necessary legislation has been passed through Parliament.

Mr Johnson is convinced that today’s vote could see him deliver on his promise to get Brexit done by the October 31 deadline.

But Mr Johnson faces a fierce week of parliamentary warfare as Labour has vowed to try to wreck his deal by insisting on adding a Second Referendum to it.

The Commons will be told to sit late into the night while the Lords could convene at the weekend as No10 scrambles to try to pass the legislation at breakneck speed.

One government aide said the coming days will be “hell on earth” in Parliament.

Cabinet ministers yesterday revealed they believe they have won enough Labour rebels to pass BoJo’s deal.

But speaker John Bercow could also block an attempt to hold a “Meaningful Vote” today — just as he did to Theresa May’s deal.

The strength of the pound is often affected by decisions made in Parliament.

While no one can predict for sure what will happen to the value of sterling after the UK leaves the European bloc, we do know that it often becomes stronger when the prospect of a deal becomes more of a possibility.

The idea of crashing out of Europe without a trade deal in place doesn’t bode well for the pound.

For example, the pound soared against other currencies after MPs voted against a No Deal Brexit back in March.

But it also slipped earlier this month after reports that Brexit talks had hit a standstill.

Ian Strafford-Taylor, chief executive of Equals currency card, said: “The gains against both currencies follow increased hope the Prime Minister may be able to get a meaningful vote on his Brexit deal within the next 48 hours.”

But he also warns that an extension to the Brexit deadline could be damaging for the pound.

“An extension would spell a period of further uncertainty for the pound while the exact terms are ironed out,” he explained.

“But it would also save the pound from a sharp decline which we could see in the event of a no-deal Brexit at the end of the month.”

Currency expert Michael Brown from Caxton added: “The numbers now appear to be present for a “meaningful vote” on the new Brexit deal to succeed, however it remains unclear whether speaker Bercow will permit such a vote to take place.

“Should a vote not take place, attention will shift towards tomorrow’s vote on the second reading of the Withdrawal Agreement Bill – the legislation that implements the deal in the UK.

“Such a vote, if passed unamended, would pave the way towards an orderly Brexit, and should see the pound continue to press higher.”