Even if the agreement is successfully blocked, the pound is unlikely to rebound sharply? The new version of the EU agreement is the real ＂reassurance＂.
In September 2nd, if the British Optima member successfully passed the legislation to prevent the agreement from the European Union, the pound is expected to rebound, but it will not rebound sharply. Only the United Kingdom and the European Union reached a new European Agreement and passed the British Parliament, thereby avoiding the destruction caused by the absence of agreement, and helping the British political situation to truly stabilize, and the pound is expected to continue to rebound.
The British pound will not rebound sharply even if it fails to prevent Britain from breaking the agreement. Foreign exchange trading
Since mid August, the pound has rebounded against the exchange rate of the euro, the US dollar and other major currencies. One reason behind this is that there are signs that the EU may be willing to amend some of the existing EU agreements. Another good news comes from the view that the British Parliament has the ability and motivation to effectively prevent non agreement from Europe.
There are signs that members of the United Kingdom who are against Britain are trying to pass a legislation to ensure that no agreement can be reached. If the market thinks they can achieve this goal, there is reason to expect the pound to rebound further.
However, the pound is facing a paradox of "no agreement to go out of Europe", that is to say, the possibility of excluding no agreement from Europe is beneficial, but on the other hand, it is a bad result, because it restricts the space to reach the new agreement. Only by reaching a new de European agreement can we create conditions for the decisive and sustained recovery of the British pound, which is what British Prime Minister Johnson is trying to achieve.
"If Britain passed the relevant legislation this week and ruled out the possibility of no agreement to depart from Europe, then the pound is expected to rebound. If we finally decide to postpone the date of delaying Europe again, the legal agreement is still likely to occur at some time in the future, and the pound may rebound, but the rate is relatively small. "
Only a new version of the euro agreement is guaranteed.
According to the financial times, Johnson will speed up negotiations in Brussels to ensure a new British agreement. At the same time, he tried to avoid a vote of no confidence next week when he was confronted by labour parties and pro European conservative rebel members.
Johnson has instructed David Frost, the chief European negotiator, to negotiate with the European Union. Throughout September, Frost will meet with EU negotiators two times a week to finalize a revised European Agreement before the EU summit in from October 17th to 18th.
In a meeting with senior European leaders, Johnson made it clear that his first goal in any round of renegotiation was to cancel the terms of the Irish guarantee. He believes that other arrangements can be found to ensure that there is no "hard" border on Ireland. French President Mucklow and German Chancellor Merkel said in August that they might be willing to listen to Johnson's proposal, thus deviating from the firm message sent by the EU: the EU agreement negotiations cannot be resumed and the Irish guarantee clause cannot be cancelled.
If we want to make the pound stronger, we need a revised version of the euro agreement between the UK and the EU, and then we must get the approval from the parliament.
Such a result will enable Britain to successfully depart from Europe and prevent any possible damage caused by the lack of agreement. In addition, this has stabilized the political environment in Britain and provided an urgent need for certainty for individuals and businesses to increase investment. This stability will open the pound's continued rebound.
Finance and economics APP reminded British Prime Minister Johnson that the possibility of revising the euro agreement would be increased by maintaining the possibility of no agreement to depart from Europe. He knows that by closing the door to other channels, the parliament will eventually have only one way to avoid the result of no agreement, and that is to vote for a European Agreement. Therefore, from the point of view of sterling, members find ways to prevent the agreement from Europe, but this is not a ticket for the pound to continue to rebound.
Software shows that Beijing time at 10:21 on September 3rd, the pound against the dollar 1.2053/55.