The fall of the GBP/USD pair to weekly lows has become perhaps one of the most interesting events in the foreign exchange market in recent days. Another attack on the weakness of the pound was provoked by the Prime Minister of the United Kingdom, Boris Johnson.
The head of government asked the Queen of England to suspend the work of the British Parliament from September 9 to October 14, and she granted his request. Thus, lawmakers can only prevent Great Britain’s exit from the European Union during the period from September 3 to 9, and also from October 14 to 31.
According to analysts, the fact that the pound quickly lost ground previously won indicates that B. Johnson remains at least one step ahead of his opponents.
So, the British prime minister made his move, what will follow next and how does this affect the dynamics of the pound?
1. Since the beginning of the Parliament, that is, from September 3, it is worth waiting for a vote of no confidence in B. Johnson and a slight but steady fall in GBP/USD. Most likely, it will not be possible to remove the prime minister from the legislators, since there are still disagreements in the Parliament.
2. Between September 9 and October 14, B. Johnson should expect actions related to an attempt to reach an agreement with the EU. If the eurozone makes concessions, it will be good news for the pound, as it seems to have come to terms with the “hard” Brexit. In this case, the GBP/USD pair will increase, which may be more or less serious.
3. If there are no agreements with the EU and the Parliament starts work from October 14, it is worth paying attention to whether it will be possible for the legislators to delay the terms of the hard Brexit or not. If so, then this will be a small positive for the GBP/USD pair. Otherwise, the UK’s exit from the bloc without a deal will be inevitable.
However, it can still change, and it is still difficult to make reliable forecasts. However, one thing is clear: B. Johnson is not David Cameron and Theresa May. An idea, albeit insane (in the opinion of some British MPs), firmly stuck in his head, and he intends to complete the matter, that is, to withdraw the United Kingdom from the EU at all costs.
The material has been provided by InstaForex Company - www.instaforex.comvia GBP/USD: Johnson paused Parliament. What to expect next?
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