Sterling has made a small-scale climb this afternoon after the Commons kicked off a debate into potential amendments, brought by backbench MPs, over the conditions of Britain leaving the European Union. Just before 3:30PM UK time, the pound was trading at €1.1540, up 0.22 percent, and $1.3179, an increase of 0.12 percent. But Sterling could be set to storm higher should an amendment from Labour’s Yvette Cooper garner support. The Cooper amendment seeks to avoid no deal by delaying Brexit and would give Parliament control over Britain’s departure if Mrs May fails to secure a deal by February 28.
If successful, the alteration could have a profound effect by giving lawmakers who want to block, delay or renegotiate Brexit a possible legal route to do so.
It proposes a nine-month extension, to 31 December, but leaves the length of delay open to debate.
Hamish Muress, currency analyst at OFX, said the Cooper amendment could push Sterling up against the US dollar as the pound would love the “stability” of a no deal scenario being taken off the table.
He told Express.co.uk: “The pound once again faces a critical juncture as Brexit proceedings come back to the fore tonight.
“The important part will be which amendments are considered for debate by the Speaker John Bercow.
“Firstly, the Cooper amendment which is widely seen as supportive for the pound, particularly against the USD, and will mean that a ‘no deal’ Brexit will be taken off the table.
“Remember, the pound is an old romantic and loves consistency and stability.
“The second amendment from Dominic Greive could be similarly supportive for the pound, whilst backing the Brady amendment could pose the biggest risk to the currency.
“If this is the case, Theresa May will go back to Brussels but she could be on a collision course with the EU, resulting in the UK accidentally crashing out in March.
“As ever, if there is fallout tonight the moves for the pound against the euro won’t be as extensive, as any Brexit agreement is bilateral in nature, and if it’s bad for the UK then it’s also bad for Europe.”
Royal Bank of Canada’s chief currency strategist Adam Cole shared a similar sentiment and predicted the Cooper amendment could prove good for the pound.
He told Bloomberg: “Cooper/Boles we think is small upside for the pound, as delay is always preferable to a forced decision.”
Theresa May today urged MPs to give her “the clearest possible mandate” to go back to Brussels and reopen Brexit negotiations with the aim of replacing the controversial backstop.
Mrs May said MPs had made clear what they did not want when they rejected her Withdrawal Agreement by a 230-vote margin earlier this month, but now it was time for them to tell Brussels what they do want.
She called for them to send an “emphatic message” to the EU by backing an amendment tabled by Tory grandee Sir Graham Brady which would require her to replace the backstop with “alternative arrangements” to avoid a hard border in Ireland.