The British pound was struggling against main rivals on Monday, with a crucial vote on U.K. Prime Minister Theresa May’s Brexit deal just a day away.
The pound GBPUSD, -0.0467% was trading at $1.2823 from $1.2830 seen late Friday in New York. The euro EURGBP, +0.1008% firmed against the pound, with one euro last buying £0.8944, from £0.8946 late Friday.
U.K. lawmakers will vote on May’s divorce deal with the European Union Tuesday. On Sunday, she warned that rejecting that agreement would “be a catastrophic and unforgivable breach of trust in our democracy,” in a commentary published by the Sunday Express. The deal is not expected to get enough votes to pass, which could mean the country leaves the EU without a deal on March 29.
But it also raises plenty of other questions. U.K. opposition leader Jeremy Corbyn said Sunday the Labour Party will push for a general election if Parliament rejects May’s deal, and that he might force a vote of no-confidence “soon.”
“Are we going to see a no-confidence vote in the government? Or another attempt by Theresa May to secure concessions from the EU? Will there be an Extension of Article 50? Or even extreme scenarios such as a new general election and a second referendum? Each of these scenarios will have a different impact on the pound,” said Hussein Sayed, chief market strategist at FXTM.
The ICE U.S. Dollar Index DXY, -0.09% held steady at 95.621, with no data scheduled for Monday. Investors were zeroing in on Chinese data that showed weak China imports and exports for December, which underpinned worries of a slowdown in the global growth engine.