EUR/GBP rebounds following a dip to 0.8730 on Brexit headlines

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  • UK PM May says a vote on whether to hold a second referendum will be included in the new Brexit deal.
  • None of the reactions suggests the new deal will pass.
  • Consumer sentiment improves slightly in the euro area in May.

The EUR/GBP came under a sudden pressure in the American trading hours after news outlets reported that British Prime Minister Theresa May’s new Brexit deal would include a vote on whether to hold a second referendum. After dipping to a 5-day low of 0.8730, however, the pair recovered its losses and last seen trading at 0.8765, where it down 0.13% on a daily basis.

Although PM May confirmed the reports by announcing the inclusion of the vote on a second referendum in the Withdrawal Agreement Bill, none of her remarks convinced that the new deal had significant enough changes for it to pass through the parliament. In fact, a number of reporters claimed that many MPs who voted in favour of the previous deal were now against the PM’s latest deal. 

According to Reuters, the DUP said that it will have to await the publication of the text of the Brexit bill to see what the proposals actually mean but added that the fatal flaws of the draft treaty remained unchanged. Additionally, former Brexit Minister Davis told reporters that he would vote against the deal because it would allow the possibility of adding a second referendum into law.

Meanwhile, the data published by the European Commission showed that the Consumer Confidence Index improved slightly to -6.5 in May’s preliminary reading from -7.3 in April to better the market expectation of -7.6 but was largely ignored by the participants.

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