Pound to rally if control of Brexit options gets vote

Bloomberg

The pound will rally if lawmakers vote to give themselves a say on what happens next with Brexit, strategists say.
Sterling was expected to gain about 1 percent if UK parliament approved a motion to allow votes on Brexit options, said Jeremy Stretch, head of Group-of-10 currency strategy at Canadian Imperial Bank of Commerce. The move would give lawmakers a series of ballots on Wednesday to find out which options can command a majority, with no agreement yet on an exit plan just weeks until a new deadline to leave the European Union.
“Markets probably already anticipate it will pass and it is the next stop on the path to a softer exit,” said Adam Cole, chief currency strategist at Royal Bank of Canada.
Market reaction “will be positive but limited if it passes as it already is in the price.”
If the motion put forward by Tory lawmakers Oliver Letwin and Dominic Grieve does pass, Parliament would vote on Wednesday on options including a second referendum, a customs union with the EU and cancelling Brexit.
Sterling slipped 0.2 percent to $1.3182, adding to a 0.6 percent drop last week, while a gauge of one-week volatility climbed.