Wednesday 27 February 2019 3:35 pm | Updated: Monday 03 June 2019 1:42 am

Sterling climbs as markets welcome parliament’s vote on possible Brexit delay

Sterling soared against the euro and dollar today as markets welcomed the possibility that Brexit could be delayed.

The pound rose 0.5 per cent to an eight-month high against the dollar of $1.331.

It did even better against the euro, bubbling up 0.5 per cent to a 21-month high of €1.170.

Prime Minister Theresa May yesterday committed to a series of votes that could conclude with MPs choosing to delay Brexit beyond the scheduled departure date of 29 March.

Parliament will vote again on May’s deal on 12 March, with a vote the next day to decide on whether the UK could crash out of the EU without a deal if May’s withdrawal agreement is rejected.

If MPs vote to avoid a no-deal Brexit, however, a third vote on 14 March would take place on whether or not to delay Brexit.

Today the government was reportedly set to support an amendment tabled by Labour MP Yvette Cooper to formalise these next steps.

Jordan Hiscott, chief trader at spreadbetter Ayondo, pointed to the twin drivers of Labour backing a second referendum and the possible extension to Article 50 behind the pound’s gains.

“Bearish positioning on sterling has been completely reversed, with a long bias in many fast money accounts taken out over the last 24 hours,” he said.

“Both the structural change and the speed positioning is prevalent. On a technical basis, if we can break above $1.33 convulsively, the next level to test would be $1.36.”

“Brexit remains front and centre for European markets,” added Josh Mahony, senior market analyst at IG.

“While March looks set to be real deal breaker, today sees the government table a motion to clarify the March voting plan, with a host of amendments also put forward afterwards.”

However, he added that by allowing MPs to vote on the option of a no-deal Brexit, the EU may not offer meaningful changes to the Prime Minister’s deal – making it less likely to find favour in the Commons.

“In many ways, May’s decision to allow parliament to vote against a no-deal Brexit also lessens the chance the EU will provide anything new by the time parliament votes next month,” he said.

Sterling’s highs contributed to a drop in value of the internationally-exposed FTSE 100, which almost 47 points to 7,104, down 0.7 per cent.

The day’s biggest fallers were Marks & Spencer – which cut its dividend to fund a food delivery venture – NMC Health, and Hiscox, which dropped despite trebling profits in 2018.