LONDON, Jan 30 (NNN-AGENCIES) – The British pound dipped against major currencies, as a much-anticipated amendment to postpone Brexit was rejected by the British parliament on Tuesday night.
The British House of Commons on Tuesday voted 321-298, with a majority of 23, against an amendment from Labour’s Yvette Cooper, for Brexit to be delayed by nine months, if no deal is agreed by Feb 26.
The latest development came as British MP’s voted on a series of amendments, to modify the prime minister’s Brexit plan, after it was voted down by a historic margin on Jan 15.
The pound fell by 0.7 percent against the U.S. dollar and 0.8 against the euro, while it was down by some 0.1 percent against both currencies, just before the parliament vote began.
Out of the seven amendments, only two were passed. One is a non-binding call on the government, to rule out no-deal Brexit, and the other demands replacing Brexit backstop with “alternative arrangements.”
The vote gives May a mandate to return to Brussels, to say the Brexit deal is likely to win in the British parliament, if changes are made to the Irish border issue. However, the EU has insisted that the Irish backstop is part of the withdrawal agreement and is not open for renegotiation.
The pound has roared higher in recent weeks as investors discount the chances of the UK crashing out of the EU without a deal, said Luke Trevail, currency analyst at TorFX, before the vote, believing it was put to the test at the parliament vote on various amendments.
Neil Wilson, analyst at Markets.com, was quoted by the BBC as saying, the pound’s drop is “quite a comedown.”
“[It] is showing how the pound remains intensely sensitive to Brexit news flow, and partially how the market had put some faith in the Remainers/soft Brexiters, forcing concessions from the government,” he says.
The Backstop plan is one of the biggest stumbling blocks to the Brexit deal. It is designed to avoid border checks between Northern Ireland and the Republic of Ireland. It is considered by some British, especially Brexiteers, to be a trap to retain Britain in a customs union with the EU and pragmatically delay their “divorce.”– NNN-AGENCIES