ZCZC
BCN-05
BRITAIN-EU-FOREX
British pound rallies after Brexit vote
NEW YORK, Jan 16, 2019 (BSS/AFP) – The British pound rallied Tuesday after
the lower house of parliament overwhelmingly rejected Prime Minister Theresa
May’s Brexit plan.
Near 2035 GMT, the pound stood at 88.71 pence to the euro, compared with
89.57 and 89.15 Monday night.
Against the dollar, the pound traded at $1.2860 against $1.2704 and
$1.2864 Monday night.
The House of Commons voted 432 to 202 against May’s plan for taking
Britain out of the European Union, one of the biggest defeats ever suffered
by a British premier.
The negative vote had been expected but the margin was much bigger than
May had hoped. Ahead of the vote, some analysts had predicted the pound could
plunge with a one-sided defeat, such as 200 votes or more.
But on Tuesday, “the pound was sold pretty significantly before the
outcome of the vote,” said Joe Manimbo, senior market analyst at Western
Union Business Solutions.
“This is a classic of ‘Buy the rumor, sell the fact’ situation.”
BK Asset Management’s Boris Schlossberg said investors simply did not
believe there was a realistic chance of a so-called “hard” Brexit, in which
Britain leaves the EU without any deal.
“Markets project beliefs and the underlying belief is that nobody’s going
to be committing economic suicide,” he said.
BSS/AFP/HR/0930