The Great British Pound underperformed in overnight trading as the March 29th deadline gets closer and closer. Opening this morning at 1.3190 against the Greenback, the Sterling has come under pressure from increased Brexit uncertainty.
Prime Minister Theresa May bowed to pressure from her Brexit leaning cabinet members and has requested only a short delay from the EU to June 30th. In response, the EC President Donald Tusk offered that a short-term delay is possible but contingent on the UK parliament passing Theresa May’s Brexit bill and heightening the importance of the third Meaningful Vote (potentially early next week). From here, there is considerable uncertainty should May’s deal be voted down a third time. May has implied that she would rather resign than seek a longer extension and the EU has confirmed it wants assurances that there will be a new political process if it were to grant an extension, whether than means elections, a second referendum or a new cross-party initiative.
In economic news, the UK headline CPI was slightly higher than expected while core CPI was lower. Both numbers came in below the Bank of England’s 2% target. Moving into Thursday, all eyes remain fixed on Brexit with some focus on the Bank of England meeting and a retail sales report.