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The UK government decided to give MPs an option to extend Brexit. What’s next for the pound?

Here is their view, courtesy of eFXdata:

Societe Generale Research discusses GBP/USD scenarios  in light of  the latest Brexit developments.

“Theresa May headed off to the EU-Arabian league open pool competition and apparently played so well she came back with a concession to Conservative remainders that they can take a ‘no deal’ exit from the EU off the table if the PMs propose deal can’t get the support of Parliament on March 12. This is, of course, a ploy to drag Hard Brexiteers towards her position, but sterling’s gained all the same,” SocGen notes.

“We still think  the best guess of GBP/USD for this time next year if  the UK avoids a no-deal exit is around USD/GBP 1.40, whereas a no-deal exit itself takes it to 1.20 (and temporarily lower). A second referendum would see GBP/USD get to 1.50 but that’s still very, very unlikely.  So it’s hard to argue with the market move, which looks significant on charts,” SocGen adds.

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