GBP price, Brexit latest and market sentiment:
- The UK Attorney General Geoffrey Cox has said the legal risk remains unchanged that the UK would have no internationally lawful means of exiting the Irish backstop in the event of Brexit.
- This means UK Prime Minister Theresa May is even less likely to win Parliament’s approval for her Brexit deal with the EU this evening.
- As a result, GBP has dropped and risk appetite more generally has tumbled.
Trader sentiment reverses
Market sentiment reversed in late morning trading in Europe Tuesday as the UK Attorney General, Geoffrey Cox, said last-minute “legally-binding” assurances won by UK Prime Minister Theresa May to her Brexit deal with the EU left the risks over the Irish backstop unchanged.
His legal opinion sent Sterling sharply lower and dented risk appetite more generally as the chances rose that May will lose the vote on her deal in the UK Parliament that is due to take place at 1900 GMT. The Irish backstop is the insurance policy that the border between the Irish Republic and Northern Ireland, which is part of the UK, will remain as it is, with no border checks.
GBPUSD Price Chart, Five-Minute Timeframe (March 12, 2019)
Chart by IG (You can click on it for a larger image)
Cox’s legal opinion came as I was on air live with my latest trader sentiment webinar so I discussed the markets’ reaction as well as market sentiment more generally. If you missed it, here’s a recording.
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— Written by Martin Essex, Analyst and Editor