Pound Sterling was down marginally against the euro to €1.1515 at 1:30pm, according to Bloomberg. The British currency had surged to a high of €1.1534 at 8:24am before plummeting sharply below €1.15 at 11am. The pound then staged another recovery, rising to €1.1529 at 12:52pm.
In early morning trading, the pound had made large gains against the US dollar, and hit a high of $1.3096 at 12:52pm, having opened at $1.3060.
But as with against the euro, the pound has started falling sharply, down to $1.3072 at 1.30pm.
Sterling has started the week against the euro close to where it ended the previous week, remaining steady for four consecutive days of trading.
BREXIT LIVE: May fury at EU’s Article 50 extension demands- ‘delaying Brexit DOESN’T deliver’
Pound LIVE: Sterling has recovered after collapsing in early morning trading (Image: GETTY)
The latter carries the risk of Parliament voting to take control of the Brexit process, possibly forcing the government to extend Article 50, if Mrs. May has nothing to show from the latest round of talks with Brussels. Either way, the pound appears to be
But the pound could yet fluctuate this week as crunch Brexit talks continuing, with Theresa May seeking to gain the concessions she feels are needed to get Parliamentary backing for her deal.
Raffia Boyadjian, a currency analyst at XM.com, warned the pound will continue heading towards volatility unless there is more clarity over Brexit.
He told poundsterlinglive.com: “If the Prime Minister, Theresa May, manages to secure legal assurances from the EU on the Irish backstop, there will likely be a meaningful vote on the revised deal.
“But if UK-EU negotiations have not been completed by then, MPs could simply vote on an amendable motion on how to proceed next with Brexit.
“The latter carries the risk of Parliament voting to take control of the Brexit process, possibly forcing the government to extend Article 50, if Mrs. May has nothing to show from the latest round of talks with Brussels.
“Either way, the pound appears to be headed for more volatility.”
It could be yet another key week for the pound, with the release of more important data that could paint a clearer picture as to how Brexit uncertainty is affecting the UK.
On Friday, the IHS Markit Manufacturing PMI for February – a survey-based activity indicator – will be released.
Pound LIVE: Sterling has started to plummet against the euro following earlier gains (Image: BLOOMBERG)
This is forecast to show a drop to 52.0 from 52.8 the month before in January.
The GfK Consumer Confidence Survey is also released on Thursday, and is expected to show a -15 result from -14 previously, primarily driven by Brexit uncertainty.
Pound Sterling Live said an even bigger-than-predicted slump could have negative repercussions for the British currency since declines in sentiment indicators usually precede falls in the economy.
On Sunday, it was revealed Brexit could be delayed until 2021 under new plans being plotted by senior EU officials.
Pound LIVE: Sterling had made significant gains against the US dollar (Image: BLOOMBERG)
Brussels is planning to tell Mrs May if she doesn’t get her deal through Parliament and wants to delay Brexit, the UK will have to remain in the bloc until at least 2021.
Three Brussels insiders claimed senior figures and governments are backing an extension of as much as 21 months beyond the proposed March 29 deadline.
One EU diplomat said: “If leaders see any purpose in extending, which is not a certainty given the situation in the UK, they will not do a rolling cliff-edge but go long to ensure a decent period to solve the outstanding issues or batten down the hatches.
“A 21-month extension makes sense as it would cover the multi-financial framework the EU’s budget period and make things easier.
Pound LIVE: Theresa May met European Council President Donald Tusk on Sunday (Image: GETTY)
“Provided leaders are not completely down with Brexit fatigue, and a three-month technical extension won’t cut it, I would expect a 21-month kick of the can.
“It is doing the rounds in Brussels corridors.
“Martin Selmayr, the European Commission’s secretary-general, among others, also fond of the idea.”
But Downing Street officials have also drawn up plans which will make a formal request to Brussels to delay Brexit for just two months if Mrs May can’t get Parliamentary backing for her deal by March 12.
The Daily Telegraph reported the plans do not specify the length of the extension, but ministers believe it will be no longer than eight weeks, and as a result, the UK would not participate in the upcoming European Parliament elections.
Number 10 has drafted a series of options looking to avoid resignations by ministers supporting taking a no deal off the table this week.
Pound LIVE: Theresa May has been holding crunch Brexit talks with Jean-Claude Juncker (Image: GETTY)
But speaking in Sharm el-Sheikh on Monday, Mrs May insisted postponing Britain’s exit from the European Union does not deliver a deal and merely delays the big decision on Brexit.
She said: “An extension to Article 50, a delay in this process, doesn’t deliver a decision in parliament, it doesn’t deliver a deal.
“What it does is precisely what the word ‘delay’ says. It just delays the point at which you come to that decision.
“And I think that any extension of Article 50, in that sense, isn’t addressing the issue. We have it within our grasp.”
The Prime Minister added: “Any delay is a delay, it doesn’t address the issue, it doesn’t resolve the issue.”