Pound soars in Asia after UK Parliament votes against no-deal Brexit

While the political situation was extremely fluid, dealers said investors were assuming the votes made a "no deal" Brexit less likely and that was cause for relief.
While the political situation was extremely fluid, dealers said investors were assuming the votes made a "no deal" Brexit less likely and that was cause for relief.PHOTO: REUTERS

SYDNEY (REUTERS, BLOOMBERG) - Sterling jumped in wild Asian trading on Thursday (March 14) as markets priced in less risk of a disorderly exit from the European Union after Parliament rejected leaving without a deal.

The pound traded as high as US$1.3380, levels last seen in June 2018 and up from an almost 21-month low of US$1.3064 on Wednesday. The euro was quoted at around 84.725 pence, its lowest since mid-2017.

While the political situation was extremely fluid, dealers said investors were assuming the votes made a "no deal" Brexit less likely and that was cause for relief.

British lawmakers on Wednesday rejected leaving the European Union without a deal in any scenario, paving the way for a vote to delay Brexit to seek a way out of the country's worst political crisis in generations.

The motion on Wednesday isn't legally binding and the UK could still potentially crash out of the EU on March 29 if no Brexit deal is agreed on and no delay is granted by the bloc.

"It should give the government a strong mandate to agree with the EU," said Commerzbank currency strategist Esther Reichelt. "But in the end, the Parliament might not like the conditions attached to a delay by the EU."