Pound DROPS against the euro and dollar amid uncertainty as Boris Johnson pauses Brexit Bill after losing key timetable vote
- The Prime Minister's Withdrawal Agreement Bill passed by MPs 329 votes to 299
- The majority of 30 on the second reading lead to a steady rise in the pound
- But it tumbled minutes later after MPs rejected Brexit timetable by 322 to 308
- It since appeared to stabilise after the sudden spike and swift decline after votes
The pound dropped against the euro and the dollar amid uncertainty as Boris Johnson paused his Brexit Bill after losing a key timetable vote tonight.
The Prime Minister's Withdrawal Agreement Bill passed by 329 votes to 299 - a majority of 30 on the second reading - leading to a steady rise in the pound up to $1.3 and €1.165.
But it tumbled just minutes later after MPs rejected the Brexit timetable by 322 to 308 - a majority of 14 - down to around $1.28 and €1.158.
The Prime Minister's Withdrawal Agreement Bill passed by 329 votes to 299 - a majority of 30 on the second reading - leading to a steady rise in the pound (pictured, the dollar after the first vote) up to $1.3
The pound also performed strongly against the euro (pictured) after the first vote, rising to €1.16
It since appeared to stabilise after the sudden spike and swift decline to around the $1.288 and €1.158.
Despite this, it has still settled near session lows against the euro and the dollar following another landmark day in British politics.
Tonight's first result inched the PM closer to his goal of leading Britain out of the EU - but the second effectively guarantees it will not happen on his 'do or die' date of October 31.
The dramatic setback came after hours of tense debate in the House of Commons to get his Brexit bill approved.
Tonight's first result inched the PM (pictured) closer to his goal of leading Britain out of the EU - but the second effectively guarantees it will not happen on his 'do or die' date of October 31
It means it has cleared the initial hurdle towards becoming law and is the first time any agreement has been backed in a vote by MPs, with the margin was significantly larger than had been expected.
After the results were declared, Mr Johnson hailed the historic breakthrough, saying he was 'joyful' that MPs had finally agreed on a Brexit blueprint.
Nigel Green, CEO of deVere Group, said: 'Tuesday night was an opportunity to move forward with the Brexit saga. The outcome means more delay and more uncertainty.
'Against this backdrop, the Brexit-pummelled pound fell yet again – even though it stabilised after its earlier spike and then sudden decline as much of the news has already been priced-in.
But it tumbled (pictured, the dollar) around 15 minutes later after MPs rejected the Brexit timetable by 322 to 308 - a majority of 14 - down to $1.2931 and €1.158
Pictured: The pound dropping against the euro. It has since stabilised after the sudden spike and swift decline to around the $1.288 and €1.158 mark it was at 4pm
'However, the British economy faces more agonising delay and UK financial assets, with the exception of property, are likely to be squeezed still further.'
He added: 'How this now plays out will depend on the length of extension offered by the EU.
'A short extension to scrutinise more fully the deal, which now has the support of the House of Commons, will be favourable.
'Hopefully, this will then be enough to get Boris Johnson's Brexit deal over the line which will ultimately be good for the pound – possibly hitting $1.35 – good for the British, EU and global economies, and good for UK financial assets.'
International stocks were higher earlier, supported by some upbeat corporate results and talk of progress in the China-U.S. trade negotiations.
Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago, said: 'It's noisy but I don't think (the Brexit vote is) a big factor.
Jeremy Corbyn ignored the threat of a general election as he responded to the PM in the Commons debate today
'Stocks have done well in the face of all of that stuff, and part of that is because markets are happy with the low interest rate environment, and that's not likely to be going away soon.'
Also, strong corporate earnings since last week have provided some respite to equity markets, which were rattled over the past few months by geopolitical worries and a slowing global economy.
The Dow Jones Industrial Average rose 10.13 points, or 0.04 per cent, to 26,837.77, the S&P 500 lost 5.43 points, or 0.18 per cent, to 3,001.29 and the Nasdaq Composite dropped 44.41 points, or 0.54 per cent, to 8,118.58.
The pan-European STOXX 600 index rose 0.09 per cent and MSCI's gauge of stocks across the globe shed 0.06 per cent.
Sterling was last trading at $1.2876, down 0.63 per cent on the day.
In the US bond market, benchmark 10-year notes last rose 8/32 in price to yield 1.7659 per cent, from 1.792 per cent late on Monday.
On the trade front, China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said on Tuesday, adding that as long as both sides respected each other, any problem could be resolved.
That followed upbeat comments on Monday by the White House.
US President Donald Trump said efforts to resolve the US-China dispute were going well, while White House economic adviser Larry Kudlow said tariffs on Chinese goods scheduled for December could be withdrawn if talks go well.