Sterling has remained sensitive to Brexit uncertainty with economists expecting positive movement from the pound should any indication of Britain’s departure being pushed back or stopped altogether emerge. Britain is scheduled to quit the European Union on March 29, 2019, with a meaningful vote on the terms of the divorce scheduled to take place on Tuesday. But in a speech today to workers at a factory in Stoke-on-Trent on the eve of the critical Commons vote, Mrs May is expected to claim the UK is more likely to stay in the European Union (EU) than leave without a deal. Ahead of the address, the pound is trading at €1.1175 against the euro at just before 09:00 GMT, almost unmoved from the open of €1.1199.
Versus the US dollar, Sterling is currently at $1.2824.
Currency exchange news website Pound Sterling Live reported: “We believe anything other than a ‘no deal’ Brexit outcome would ultimately see the British Pound move higher.”
Mrs May is expected to tell factory workers in Stoke-on-Trent, where 69.4 percent of voters backed Leave, on Monday: “I ask MPs to consider the consequences of their actions on the faith of the British people in our democracy.
“Imagine if an anti-devolution House of Commons had said to the people of Scotland or Wales that despite voting in favour of a devolved legislature, Parliament knew better and would overrule them. Or else force them to vote again.
“What if we found ourselves in a situation where Parliament tried to take the UK out of the EU in opposition to a remain vote?
“People’s faith in the democratic process and their politicians would suffer catastrophic harm.
“We all have a duty to implement the result of the referendum.”
It comes as The Guardian reported that Brussels is preparing to delay Brexit until July with doubts growing over Mrs May being able to pass through her deal.
An EU source told the newspaper: “Should the prime minister survive and inform us that she needs more time to win round parliament to a deal, a technical extension up to July will be offered.”
The report has been disputed by a Commission source.
The pound climbed to its highest since late November on Friday as Cabinet ministers were reported to have claimed that the possibility of Article 50 being extended is looking increasingly likely, accoridng to The Evening Standard.
A denial by Prime Minister Theresa May’s spokeswoman of a newspaper report knocked sterling off highs.
A senior minister was quoted as saying: “Certainly, if there was defeat on Tuesday and it took some time before it got resolved, it’s hard to see how we can get all the legislation through by March 29.”
Lukman Otunuga, research analyst at FXTM, wrote: “Sterling’s aggressive appreciation following the report continues to highlight how the currency remains extremely sensitive and highly reactive to Brexit headlines.”