The European Union is getting ready to postpone Brexit to at least until July when the new European Parliament convenes. This would be a delay of around three-four months from the original March 29th deadline. EU Council President Donald Tusk is readying an extraordinary EU Summit to accept a delay request, should one come from the UK.
This is the first time that a new date has been set. It is also the first report about preparations from the European side to an extension of Article 50. Up to now, the media focused on a move by the British team, quickly denied by the government again and again.
Preparations in Brussels and a new date could boost the British Pound. GBP/USD had already begun moving higher on hopes for a delay, and now they sound more concrete. The farther the can is kicked down the road, the better for Sterling. While markets dislike uncertainty, they hate Brexit, and any delay is a blessing.
Officially, the EU is set to offer new assurances on the Irish backstop on Monday to convince British Members of Parliament to support the Brexit deal on Tuesday. Brexit Secretary Barclay said that there has been “positive movement” over the weekend, but PM Theresa May is still set to lose the vote by a wide margin. She will then have three days to present a new program but the clock is still ticking, and MP’s would prefer a delay to new elections in which they could lose their seat.
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