Pound Hangs On Brexit Politics

Brexit Cross-Party Talks To Accelerate

Theresa May is going to accelerate cross-party Brexit talks this week as MPs come back from a long Easter holiday break. The UK’s prime minister will step-up negotiations with Labour in a bid to strike a compromise as soon a possible.

Cabinet ministers presented a rosy picture when asked about the outcome of the discussions. However, in private, they confessed that Labour’s plan of a permanent customs union leaves the PM empty-handed.

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Conservatives Running Out of Time Amid European Elections

The clock for May is ticking and she needs to act quickly before her party suffers a crushing defeat in the May European elections.

Labour is offering no incentive, and eurosceptics and the DUP are demanding changes that PM May isn’t willing to make. Because of this, a parliament-approved Brexit plan might have trouble coming to life before the October 31st deadline.

But May will need to receive all the help she can as her Conservative party faces a strong defeat in the EU elections, a poll shows.

Prime Minister Could Face New Leadership Challenge

In the likely scenario that May fails to persuade parliament to back her deal by May 22 – a day before the European elections commence – she could face a new leadership challenge.

Despite surviving a confidence vote that cannot be re-challenged until December, Conservative MPs and backbenchers are discussing the potential to remove her from Number 10 within a matter of few days.

In fact, it is not certain she will even have until May 22nd as Downing street requires a more pro-Brexit PM and fast.

Is There Hope For Pound?

The British pound fell below the $1.30 support last week. Although, in consolidation, prices have broken outside both the minor and major ascending channels. And this adds a bearish bias on sentiment. With GBPUSD remaining below $1.30, we expect short-term weakness to weigh the currency pair down. But the likelihood of retesting the former channel resistance also plays a part.