Sterling surges above $1.22 after MPs rip up Boris Johnson’s Brexit strategy
The pound hit $1.22 against the dollar as it continued to rise after MPs defeated Prime Minister Boris Johnson’s Brexit strategy in Parliament last night.
Sterling hit $1.22 by lunchtime, helped by poor US manufacturing data, before falling back slightly. The pound is now hovering around $1.293, an increase of 0.89 per cent.
Read more: Sterling recovers from 34-year low amid Brexit showdown
The pound crashed to a 34-year low against the dollar yesterday amid ongoing uncertainty over Brexit, but recovered in the evening.
Johnson was defeated by a majority of 27 in a crucial vote last night, which paves the way for MPs to force the Prime Minister to seek an extension to the Brexit deadline to avoid Britain leaving the EU without a deal.
The 21 Conservative MPs who rebelled against the government, including Ken Clarke and former Chancellor Philip Hammond, had the whip removed shortly after the vote.
Connor Campbell of Spreadex said: “In quite the reversal from Tuesday’s 34-year lows, Parliament’s attempts to avert a no-deal Brexit have put a spring in the step of the pound.
“Against the dollar especially sterling was feeling rejuvenated,” Campbell continued, “sporadically crossing $1.222 as cable rose around 1 per cent. That this comes despite the still present threat of a general election shows just how desperate the currency is to avoid Britain crashing out of the EU without an agreement in place – some uncertainties, after all, are more palatable than others.”
Read more: The 21 Tory MPs Boris Johnson has sacked from the party after Brexit defeat
Saxo Bank’s John Hardy said: Before we take the big relief rally as a sign of greater things to come… let’s consider whether yet another extension of Brexit will do the UK economy any favours and how this still feeds into the risk of an eventual Corbyn government in an election scenario.”